Key Takeaways

  • Israeli officials have detained a military reservist and a civilian, accusing them of using classified data to place bets on Polymarket regarding Israeli military strikes on Iran
  • The reservist, employed by Shin Bet (Israel’s internal security agency), acquired confidential information to make those wagers
  • A Polymarket user named “ricosuave666” reportedly earned over $152,300 from bets on Israel’s military operations in Iran during June 2025
  • Prosecutors plan to pursue criminal charges including security-related violations, bribery, and obstruction of justice
  • Israeli officials called the use of classified info for betting a “genuine security threat” to military operations

Israeli law enforcement has arrested two individuals on suspicion of leveraging classified military intelligence to wager on the Polymarket platform. Those detained include a military reservist and a civilian associated with Shin Bet, Israel’s domestic security service.

A joint statement from Israel’s Defense Ministry, Shin Bet, and police revealed the reservist obtained classified data during military service. This information was then used to place wagers on prediction markets about Israeli strikes against Iran. The prosecution intends to file criminal charges such as security-related offenses, bribery, and obstruction of justice.

The arrests follow Israeli media reports about suspicious betting activity from last year. A user going by “ricosuave666” placed multiple bets linked to Israel’s military actions in Iran in June 2025. Israel’s state-owned Kan news outlet reported the account wagered tens of thousands of dollars on markets about Israeli military strikes.

The account is said to have won over $152,300 from these bets. A single winning wager on “Israel military action against Iran by Friday” earned more than $128,700 alone. The account accurately predicted the timeline around a 12-day conflict between Israel and Iran.

It remains unclear if the detained individuals are behind the ricosuave666 account. Israeli officials did not specify which Polymarket accounts are under investigation. The account went dormant for six months after the initial winnings before resuming trading last month.

Security Risks of Misusing Prediction Markets

Israel’s Defense Ministry issued a warning about the security risks posed by such betting behavior. Officials stated that bets based on secret information create a “real security risk for Israel Defense Forces activity and national operations.” The ministry added that military, security, and police units will continue pursuing anyone who illegally uses classified information.

A lawyer representing the reservist told Bloomberg the indictment is “flawed.” The attorney also noted the charge of harming national security has been dropped from the case.

Prediction markets let users bet on future events ranging from political outcomes to sports results. Advocates argue these markets offer valuable insights by giving people financial incentives to share knowledge. Critics view them as gambling platforms that encourage misuse of sensitive information.

Rising Insider Trading Controversies

This marks the first known arrest for insider trading on a prediction market platform. Several U.S. lawyers specializing in prediction markets confirmed they were unaware of any prior arrests. The Israeli case follows multiple insider trading controversies that have emerged in recent months.

In December, a trader made $1.2 million with accurate bets on Google’s most-searched people in 2025. Another bettor earned over $400,000 after wagering Nicolás Maduro would be removed as Venezuela’s president—this bet was placed less than five hours before the operation that captured him.

Kalshi, Polymarket’s main competitor, recently expanded its market-surveillance program to detect insider trading. Co-founder Tarek Mansour said Kalshi has referred several cases to law enforcement. Polymarket did not respond to requests for comment about the Israeli arrests.

Israeli military activities remain popular betting topics on Polymarket. Over $3 million has been wagered on “Israel Strikes Iran” markets with deadlines through June 2026. The platform also hosts bets on U.S. military strikes against Iran, with trading volume exceeding $238 million for that question.

The market currently assigns a 53% probability the U.S. will strike Iran before the end of June. Users have placed over $12 million betting on a U.S. strike by February 28, with the market giving that outcome a 16% probability. The Pentagon has instructed a second aircraft carrier strike group to prepare for deployment to the Middle East.