Israeli authorities have arrested and indicted two people for allegedly using secret information to place bets on the predictions market Polymarket related to Israel striking Iran.
In a joint statement on Thursday, Israel’s Defense Ministry, its internal security service Shin Bet, and police said a military reservist and a civilian were arrested after an investigation found that the reservist obtained classified information to place the bets.
The prosecutor’s office will pursue criminal charges for security-related offenses, bribery, and obstruction of justice. Authorities said the reservist was working for Shin Bet.
Prediction markets have seen major insider trading scandals this year after a Polymarket user won a bet that Nicolás Maduro would be ousted as Venezuelan president hours before he was captured by US forces, profiting around $400,000.
The Israeli state-owned news outlet Kan reported last month that the Polymarket user “ricosuave666” placed several bets related to Israel’s military operations in Iran in June 2025, but it’s unknown if those arrested are behind the account.
The account reportedly wagered tens of thousands of dollars and earned over $152,300, betting on markets such as “Israel strike on Iran on June 24” and “Israel military action against Iran by Friday,” with the latter winning over $128,700.
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Prediction markets lead to real security risks when misused
Lawmakers worldwide have raised concerns that insider knowledge could be exploited in prediction markets, undermining market integrity and eroding public trust.
Israel’s Ministry of Defense said bets based on secret information pose a “real security risk for Israel Defense Forces activity and national activity,” adding that Israel’s military, security and police units will continue to pursue action against anyone who uses classified information illegally.
A lawyer representing the reservist told Bloomberg that the indictment is “flawed,” adding that the charge of harming national security has been dropped.
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