Bloomberg Found $200 Million in Suspicious Wagers on Kalshi and Polymarket. An Army Sergeant Has Already Been Indicted.
A Bloomberg investigation identified approximately $200 million in wagers on Kalshi and Polymarket between January and June 2026 displaying characteristics associated with potential insider trading — concentrated in geopolitical event markets. A federal indictment unsealed in April charged US Army Master Sergeant Gannon Ken Van Dyke with using classified information about Operation Absolute Resolve, the operation that captured Venezuelan President Nicolás Maduro, to generate $409,000 in profit. 57% of wallets with unusually successful returns were created within 24 hours of placing bets. The House Oversight Committee has launched a formal investigation.
A Bloomberg investigation published July 20 identified approximately $200 million in wagers on Kalshi and Polymarket between January and June 2026 that displayed characteristics associated with potential insider trading, with geopolitical event markets — including those covering tensions with Iran and political developments in Venezuela — accounting for a significant portion of the suspicious activity. The most striking detail in the dataset: 57% of wallets with unusually successful returns were created within 24 hours before placing the bets that generated those returns. Fresh accounts, consistently profitable, on markets tied to events that subsequently occurred — a pattern that analysts say is difficult to explain without access to non-public information.
The investigation has already produced a federal criminal case. A grand jury indictment unsealed on April 24, 2026, charges US Army Master Sergeant Gannon Ken Van Dyke with using classified intelligence about Operation Absolute Resolve — the operation that led to the capture of Venezuelan President Nicolás Maduro — to place wagers that generated more than $409,000 in profit. Van Dyke had access to mission-critical intelligence ahead of the operation and is alleged to have converted that foreknowledge into prediction market positions before the news was public. The case is the first federal criminal prosecution of a prediction market participant for insider trading and establishes that the conduct can be prosecuted under existing law — even though prediction markets did not exist when the insider trading statutes were written.
Both platforms say they have implemented screening measures. Kalshi now collects employment data from users in certain markets to identify prohibited participants, bars politicians from wagering on their own campaigns, and bars athletes from betting on markets tied to their own sports. But Bloomberg found that new evasion techniques are emerging faster than the platforms can counter them — fresh wallets, proxy accounts, and structuring bets across multiple accounts to stay below detection thresholds. The House Oversight Committee, led by Chairman James Comer, launched a formal investigation into insider trading on prediction market platforms following the Bloomberg report. The investigation follows directly from the House Agriculture Committee hearing on July 22, where integrity monitoring was a central issue, and from the Group of Copenhagen's report on the same day flagging the Polymarket market on Folarin Balogun's availability — which was opened before FIFA publicly confirmed his suspension had been lifted.
The insider trading problem is structurally different from the state-versus-federal regulatory dispute over sports event contracts. A state attorney general suing over sports gambling enforcement is a known quantity: courts can apply existing law, platforms can geofence, and the CFTC can preempt or not. Insider trading on geopolitical prediction markets is harder to contain. The markets that attracted the most suspicious activity are precisely the ones that generate the clearest information signal — which candidate will win, which operation will succeed, which policy will change — because they involve participants who may have access to information that markets cannot price. Whether prediction markets can solve that problem with technology, or whether regulators need to impose new rules, is now an open question at both the Justice Department and on Capitol Hill.
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Kalshi Suspends Congressional Candidate for Trading on Own Race — Senate Already Banned Members
Kalshi disclosed on August 31 that it suspended North Carolina congressional candidate Laurie Buckhout for three years and fined her $2,589 for trading on her own race — the first publicly known enforcement action against a candidate for prediction market insider trading. Kalshi said it found multiple politicians trading on races they were involved in, including former Congressman George Santos. The Senate had unanimously banned its members and staffers from prediction market trading on April 30. CNN published a major feature on September 24 documenting election officials' concerns about disinformation and insider trading risk from prediction markets as the midterms approach.
Pew Research: Prediction Market Volume Doubled May-July, Sports Now Largest Category
A Pew Research Center analysis published September 23 found that combined monthly trading volume on Kalshi and Polymarket more than doubled from May to July 2026 — rising from $26 billion in May to $53 billion in July — driven primarily by sports contracts. Sports is now the largest trading category on both platforms. During the FIFA World Cup in June and July, Kalshi's monthly sports volume reached $58 billion. Over the same period, Americans wagered roughly $40 billion at licensed sportsbooks — suggesting prediction market sports volume has approached or exceeded licensed sports betting in dollar terms.
Democrats Now 60% Senate, 90% House Favorites on Prediction Markets — Biggest Shift Since 2024
Prediction markets on Kalshi and Polymarket have moved decisively toward Democratic control of both congressional chambers in the 2026 midterms. Democrats are priced at approximately 60% to win Senate control (Republicans 40%) and roughly 90% to win House control as of September 21. Republicans had been at 80%+ in Senate control markets when the market opened in November 2024. The shift began in February 2026 following the Iran war and has accelerated through fall as rising gas prices pushed Trump's approval ratings lower. More than 500 active midterm markets are live across Kalshi and Polymarket combined.