Israeli authorities have arrested several people and charged two on suspicion of using classified information to place bets about military operations on the popular prediction market platform Polymarket.
Prosecutors say a civilian and a military reservist have been indicted for bribery and obstruction of justice, with an undisclosed number of others also arrested for placing Polymarket wagers based on classified information, according to a statement released Thursday by officials in Tel Aviv.
While the names of those charged and the specific bets they made were not disclosed, the announcement comes weeks after Israeli media reported that security agencies were probing whether military officials were turning secret intelligence about military strikes into Polymarket bets.
Kan News, Israel's public broadcaster, reported last month that government investigators were examining Polymarket bets on an Israeli strike on Iran in June 2025, when the countries fought a 12-day war.
Polymarket did not return a request for comment.
Prediction markets have been growing in popularity in recent months. The apps allow people to place high-figure bets on the outcome of future events, whether a basketball game, what phrases President Trump will use at his next press conference, or election results.
The charges mark the first publicly known instance of arrests tied to a prediction market bet allegedly made using military secrets.
In January, a Polymarket trader turned a $32,000 bet into a $400,000 payday after correctly guessing that the U.S. would topple Venezuelan leader Nicolás Maduro before the operation was made public.
While that trade set off a debate about insider trading on the platform, U.S. authorities have been mum on whether it was made by someone abusing military information, or just a bettor with a particularly well-timed wager.
In Trump's second term, the two dominant prediction market sites, Polymarket and Kalshi, have received a warm welcome in Washington, as Trump officials dropped Biden-era legal challenges against the companies and vowed to defend the industry's right to exist in court.
But the two sites have notable differences.
For instance, most trading on Kalshi is done with U.S. dollars, whereas Polymarket traders tend to bet with cryptocurrencies.
Kalshi is regulated by the Commodity Futures Trading Commission, which bans offering bets that involve wars, terrorism and assassinations. Polymarket, by contrast, operates an overseas exchange outside the reach of U.S. authorities.
As a result, Polymarket's overseas exchange has become a magnet for some of the most controversial kinds of prediction market wagers.
"If someone is doing something they know they shouldn't be doing, they're much more likely to be doing that on Polymarket than Kalshi," said Joseph Grundfest, a former Securities and Exchange commissioner who is now a law professor at Stanford University.
"The problem is we have a wide array of markets that are illegal, immoral and problematic that are facilitated by those trading with anonymous crypto," he said. "Now prediction markets like Polymarket are the latest manifestation of this problem."
While bets on military strikes, land invasions and global famine happen on Polymarket's overseas platform, the company is also planning to launch a U.S. app that will be overseen by the CFTC after a key approval by Trump officials. The Biden administration had raided the Polymarket CEO's home and shut down the company's American business in 2022.
The president's son, Donald Trump Jr., is an advisor to both Polymarket and Kalshi. His venture capital fund, 1789 Capital, has invested in Polymarket. And the president's own social media site, Truth Social, has plans to launch its own prediction market service. All of which has fueled critics who argue that the Trump family stands to gain financially by allowing prediction market platforms to operate with light-touch regulations.
Grundfest, the former SEC commissioner, said the arrests in Israel should put militaries around the world on edge about personnel attempting to cash in on classified secrets.
"Such bets," he said, "can put your own military at greater risk because you are signaling to your enemies what may happen, and that puts your own troops in danger."
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