Betting on the weather or the winner of the Eurovision Song Contest is nothing new. But increasingly, people are also placing bets on wars.
More and more often, specialised platforms allow users to bet on geopolitical developments, including military escalations, assassinations or political decisions. Platforms such as Polymarket and Kalshi are currently experiencing a boom, with criticism growing at the same time.
Prediction markets operate on a simple principle: users buy shares in the likelihood of a particular event occurring or not. These “yes” or “no” outcomes are traded in a similar way to stocks, with prices reflecting the market’s estimated probability.
If the event occurs, the value of the share rises, potentially generating significant profits. Estimates suggest that global trading volume on such platforms has already reached around $47 billion.
Platforms like Polymarket and Kalshi have seen rapid growth since recent US presidential elections. In some cases, their forecasts have proved more accurate than traditional polling, attracting increasing numbers of investors.
Some of these platforms are backed by major financial players. Tech billionaire Peter Thiel is reported to have invested millions in Polymarket.
There are also links to the circle of US President Donald Trump. His son, Donald Trump Jr., is associated with Kalshi, and plans for a separate prediction platform are reportedly under way.
These political and financial connections have raised concerns, particularly when it comes to sensitive issues such as war or international crises.
The controversy intensifies when bets are placed on ongoing conflicts. On some platforms, users have traded on scenarios such as the assassination of political leaders or the escalation of military operations.
There have been repeated cases where new accounts appeared shortly before major developments and placed highly targeted bets on the correct outcomes.
For example, around four weeks ago, six accounts reportedly made $1.2 million on Polymarket after correctly predicting 28 February as the start of a US offensive against Iran. The bets were placed just hours before the bombardments began.
Such cases have fuelled suspicions that insiders with privileged information could be using these platforms to generate profit.
Beyond financial risks, critics are also questioning the role of these platforms in shaping public debate. Some foreign journalists have reported being paid to produce articles based on prediction market data, with bonuses tied to high click rates.
Critics warn that such content could influence how events are perceived, as these platforms may not only reflect public sentiment but also actively shape it.
Legally, prediction markets operate in a complex environment. In the US, betting on certain events is prohibited if it is deemed harmful to the public interest, which could apply to war or assassinations.
However, the platforms argue that they are not traditional betting operators but financial markets, and should therefore be regulated differently. The legal framework remains unclear, and courts are likely to play a key role in resolving the issue. Political pressure is also mounting, with some US lawmakers already calling for legislation to ban such practices.
Among the critics is Chris Murphy, a Democratic senator from Connecticut, who has warned that such platforms raise serious ethical and governance concerns.
He described them as fundamentally corrupt markets, arguing that they are rife with insider information and create perverse incentives, particularly within government, for actors to steer decisions in directions that serve their own financial interests.
In an effort to improve their image, these platforms are increasingly focusing on less controversial topics such as sport and are introducing new rules aimed at formally prohibiting insider trading.
