War prediction markets are a national-security threat

(theatlantic.com)

126 points | by fortran77 2 hours ago

24 comments

  • furyofantares 1 minute ago
    To whatever extent this is true, one would also expect it to be manipulated by all interested state actors.
  • Footnote7341 1 hour ago
    Isnt this silly when you can calculate the chance of war in Iran by oil futures instead. Prediction markets are just explicit markers of information that is already being traded on in 100 different ways.
    • jimkleiber 1 hour ago
      Yeah but less direct incentive than "If my friends (and I) bet money on X, and I do X, they (and I) make money."
      • metalcrow 59 minutes ago
        Not by much, plus the volume is much lower on prediction markets, so people with large pockets who happen to be in power and are capable of doing big moves like this would make more money on the oil futures.
        • pinkmuffinere 32 minutes ago
          I wonder if there's profit to be made by looking at the futures markets, figuring out the implied probability distribution of different events, and then buying prediction markets when there's a mis-match? There sure are many inexperienced players entering predictions markets, just waiting to be fleeced...
    • tlb 23 minutes ago
      Oil prices are affected by many other things too. It's valuable to isolate individual factors.
    • breppp 1 hour ago
      The idea is not economic hedging but gambling and corruption
      • nazcan 40 minutes ago
        Yes, but they are saying that if you allow economic hedging, you are also allowing gambling - just a bit more indirectly.
        • breppp 33 minutes ago
          maybe, but that is a by product of a real function (hedging). The reason prediction markets deal with news is so they can attract gamblers. Also compare marketing efforts of prediction markets and SEC control of real markets
    • alephnerd 47 minutes ago
      > Isnt this silly when you can calculate the chance of war in Iran by oil futures instead

      This is why I'm opposed to prediction markets - they're gamified futures contracts (unsurprising given the founders at Kalshi are ex-Citadel and why Intercontinental Exchange executed growth equity rounds with Polymarket). A lot of degenerate gamblers are basically being taken to the cleaners as they lack the experience to actually mitigate risk or understand how to strucure futures contracts.

      And an actual insider has much easier and much more legally defensible alternatives to conduct insider trading than using a platform that has KYC requirements.

    • amelius 1 hour ago
      Yeah we should ban derivatives too.
      • Zigurd 54 minutes ago
        I hope everyone reading this realizes that commodity futures are useful and easily distinguished from prediction markets, which are a ruse to get around restrictions on gambling.
      • gruez 1 hour ago
        /s?
        • JumpCrisscross 1 hour ago
          Don’t think so. A lot of peoples’ first reaction to something they don’t understand is to try and make it go away.
          • fragmede 57 minutes ago
            A lot of people reaction to understanding what derivatives are are also to try and make them go away. Thinking derivatives are legalized gambling, and being against gambling entirely, doesn't require a lack of understanding of derivatives to be against them.
    • pstuart 1 hour ago
      Except this wasn't driven by Oil. It was driven by Israel.
      • thephyber 18 minutes ago
        The White House has admitted that Israel had actionable intelligence that several of the Iranian political leadership were having a physical meeting together and they decided to attack to decapitate the government. The US decided to attack Iranian capabilities preemptively to reduce the inevitable response to US military, embassies, and allies in the region.
        • mullingitover 12 minutes ago
          It’s bad enough the politicians lied when they campaigned on no more wars in the Middle East, they don’t need to insult our intelligence with these moronic cover stories.

          If they didn’t want Israel dragging the US into wars they could’ve just placed a call to Iran to warn them.

          • pstuart 4 minutes ago
            We live in a post truth age, unfortunately. Many citizens are happy to only hew to the truth that they want, versus the "real" truth. (note the quotes -- truth is tricky).

            There's a bitter irony in this issue -- toppling the regime in Iran would be a wonderful thing, but doing so via bombs is not the way. We have Afghanistan and Iraq as very dear lessons in how not to do it.

      • Dig1t 43 minutes ago
        No idea why you're being downvoted, there is a mountain of evidence that this is the case. We are doing this because of Israel.

        Marco Rubio said outright we went in because of Israel. Just watch Trump's speeches, he literally talks about the power of the Israel lobby and hopes he is doing a good job for them. Netanyahu has visited Trump 7 times in the last year, each visit has been leading up to this move. Trump's biggest mega donors are Israeli dual citizens with strong ties to their home country. Miriam Adelson, Sheldon Adelson, Larry Elison (who has conveniently taken control of the TikTok algorithm and banned the phrase "#freepalestine" through his connection with Trump) have donated hundreds of millions for this exact outcome. These donors have direct ties to the Israeli government.

        https://www.aljazeera.com/news/2025/10/13/who-is-miriam-adel...

        There is very little evidence that the strikes are being driven by oil, in fact oil is the perfect excuse to use as cover. It was the exact same thing with the Iraq war. Iraq and Iran were the two largest threats to Israel, we went into Iraq to regime change them and now we are finishing the job with Iran. Now there are no threats to Israel's expansion to the rest of the middle east. The ruling party (Likud) supports the Greater Israel project, which aims to expand Israel's borders to Egypt, Saudi Arabia, Syria, Iraq, and Lebanon.

        https://en.wikipedia.org/wiki/Greater_Israel

        • pstuart 37 minutes ago
          I'm assuming that it's assumed that I'm slagging on Israel for some irrational hate -- I'm not. I'm commenting based upon reports that I've seen (effectively what you're referred to), not on ideology or feellings.

          Thanks for having my back! I think of HN as a community of intelligent people and it's always disappointing to be reminded that that alone is no guarantee of healthy discourse.

  • unyttigfjelltol 36 minutes ago
    Folks, the President announced the attack and rough date ten days in advance.[1] He did the same exact thing in 2025, with strikes beginning on the 61st day after a 60-day deadline.[2]

    This particular market wasn’t about the likelihood of a strike but the probability of radical success. It seems at least possible in the circumstances that the Iran Supreme leader chose his own fate, which was inherently predicable and also exactly what I seem to recall him publicly predicting, albeit without a strict deadline.[3]

    [1] https://www.bbc.com/news/articles/c86yjnw4x49o

    [2] https://www.timesofisrael.com/liveblog_entry/trump-says-he-g...

    [3] https://www.malaysianow.com/news/2026/03/01/khamenei-killed-...

    • dastuer 24 minutes ago
      The site you cite for [3] reads:

      "Khamenei, the leader of the great nation of Iran, the freedom seekers of the world and the Islamic nations, has joined the highest paradise and reached his long-cherished wish of martyrdom in the holy month of Ramadan," said an announcement aired on Iranian state television.

      Sounds to me like it was made up after the fact.

      • abustamam 5 minutes ago
        In Islam, a Muslim who dies in war is considered a martyr, and it's desirable to die in the month of Ramadan. In other words, it's something that most Muslims want to have happen, but it's not like something we want to make happen. Like I don't want to die right now, but if I were to die, may as well be during Ramadan.
    • AnimalMuppet 10 minutes ago
      That gives me pause, given what he's been saying about Cuba recently...
  • Uhhrrr 1 hour ago
    Placing a bet based on insider national security information should be regarded as leaking. But the markets aren't the problem here.
    • jimkleiber 1 hour ago
      Well markets give a huge financial incentive for it. Before you had to get paid a bribe for an intelligence agent. Now you can just "legitimately" bet on a market. It's a LOT easier and more spread out, I imagine.
      • spiderice 19 minutes ago
        The existence of banks gives a huge financial incentive to rob them. That doesn't mean we should get rid of banks. It means we should create a huge disincentive to rob them (which we do). Same thing needs to happen to people using national intelligence secrets in prediction markets.
    • _vertigo 54 minutes ago
      You couldn’t design a better system for incentivizing leaks if you were trying. Hell, the CEO literally said as much. Not sure how you can conclude the markets aren’t the problem.
  • beyondCritics 7 minutes ago
    Statistical clueless amateurs found something they did not like, but of course were unable to convert their suspicions into something sound. They do not even think about it. Nevertheless a big sensation was anounced. I am tired of this.
  • andai 1 hour ago
    > The day before, 150 users bet at least $1,000 that the United States would strike Iran within the next 24 hours

    Yeah, I heard the same thing at the same time from several friends. And I'm not talking top brass, so it must have been pretty obvious at that point.

    • brandall10 1 hour ago
      There were definite geopolitical signals of an impending conflict - ie. warships moving into the region, Iran increasing oil exports just days before the attack.

      I guess what might be more interesting is how many people bet $1000 the day before that, and the day before that. That would be more helpful to determine what is noise from well-informed outsiders vs. insiders.

      • pinkmuffinere 37 minutes ago
        > There were definite geopolitical signals of an impending conflict - ie. warships moving into the region, Iran increasing oil exports just days before the attack.

        As a noob to this area, how would [Iran increasing oil exports] indicate [higher chance of impending conflict]? Is the idea that Iran exported more oil to raise some funds in expectation of the conflict? Surely if Iran expected conflict it would have done more than just increase oil exports?

        • brandall10 30 minutes ago
          It could signal potential disruption to the Strait of Hormuz.
      • AnimalMuppet 7 minutes ago
        And what were the odds?

        That is, if it's 20:1, say, then I can bet $1000 to win $20,000. I can do that several days in a row (if I've got that kind of money). If I think there's, say, a 25% chance that the US is going to attack, then I only have to be within four days.

  • int32_64 57 minutes ago
    Lindsey Graham candidly admitting to being the agent of a foreign country is a National-Security threat.
    • coliveira 44 minutes ago
      He's not afraid because there are countless others in congress.
    • Analemma_ 22 minutes ago
      The Foreign Agents Registration Act has a de facto Israel exception. If it didn’t, half of Congress would be in violation.
  • WalterGR 1 hour ago
    Related: https://news.ycombinator.com/item?id=47211476 - “Allegations of insider trading over prediction-market bets tied to Iran conflict” (morningstar.com)

    97 points | 5 days ago | 55 comments

    Also from The Atlantic about prediction markets: https://www.theatlantic.com/technology/2026/03/central-lie-p... - “A Technology for a Low-Trust Society”

  • WarOnPrivacy 1 hour ago
  • _vertigo 57 minutes ago
    Rhetorical question: why do non-insiders still bet in these markets? Surely, after all of the focus on insiders, people will begin to realize that betting without insider knowledge is a fool’s gambit..
    • coliveira 45 minutes ago
      Because the way these companies make money is incentivizing the behavior of gambling addicts. It's just like asking why people will continue taking drugs if it's known to harm them.
  • pinkmuffinere 1 hour ago
    > Ayatollah Ali Khamenei was not, it’s safe to assume, a devoted Polymarket user. If he had been, the Iranian leader might still be alive. Hours before Khamenei’s compound in Tehran was reduced to rubble last week, an account under the username “magamyman” bet about $20,000 that the supreme leader would no longer be in power by the end of March.

    I know this is more for the drama than an actual claim, but it made me wonder -- is this bet a remarkable occurence in the data, or just one trade in a sea of similar trades? _Would_ somebody have been able to guess it? I looked for the original market[0], and am surprised by two things:

    1. There was lots of activity around that value when the order was placed, so I don't think the trade would have alerted anyone [1].

    2. Polymarket lists the trade as happening _19 days ago_, Feb 16! I don't understand why polymarket says it happened feb 16, when all the news I've seen reports it happening just before the strikes. I'm guessing there's a bug in the way polymarket displays past trades?

    Note that if polymarket is displaying the history of trades incorrectly, my claim #1 may not hold.

    E̶d̶i̶t̶:̶ ̶M̶a̶g̶a̶m̶y̶m̶a̶n̶'̶s̶ ̶g̶e̶n̶e̶r̶a̶l̶ ̶h̶i̶s̶t̶o̶r̶y̶ ̶o̶n̶ ̶p̶o̶l̶y̶m̶a̶r̶k̶e̶t̶ ̶i̶s̶ ̶a̶l̶s̶o̶ ̶r̶e̶a̶l̶l̶y̶ ̶s̶u̶r̶p̶r̶i̶s̶i̶n̶g̶.̶ ̶L̶o̶o̶k̶i̶n̶g̶ ̶a̶t̶ ̶t̶h̶e̶ ̶c̶l̶o̶s̶e̶d̶ ̶p̶o̶s̶i̶t̶i̶o̶n̶s̶,̶ ̶t̶h̶e̶y̶ ̶j̶u̶s̶t̶ ̶_̶d̶o̶n̶'̶t̶_̶ ̶s̶e̶e̶m̶ ̶t̶o̶ ̶l̶o̶s̶e̶[̶2̶]̶.̶ ̶A̶m̶ ̶I̶ ̶m̶i̶s̶r̶e̶a̶d̶i̶n̶g̶ ̶t̶h̶i̶s̶ ̶d̶a̶t̶a̶?̶ ̶T̶h̶e̶y̶ ̶d̶o̶ ̶w̶a̶g̶e̶r̶ ̶a̶ ̶l̶o̶t̶ ̶a̶b̶o̶u̶t̶ ̶t̶h̶e̶ ̶m̶i̶d̶d̶l̶e̶ ̶e̶a̶s̶t̶,̶ ̶b̶u̶t̶ ̶t̶h̶e̶y̶ ̶_̶a̶r̶e̶n̶'̶t̶_̶ ̶e̶x̶c̶l̶u̶s̶i̶v̶e̶l̶y̶ ̶w̶a̶g̶e̶r̶i̶n̶g̶ ̶o̶n̶ ̶t̶h̶a̶t̶;̶ ̶t̶h̶e̶y̶ ̶w̶a̶g̶e̶r̶ ̶o̶n̶ ̶p̶l̶e̶n̶t̶y̶ ̶o̶f̶ ̶o̶t̶h̶e̶r̶ ̶s̶t̶u̶f̶f̶ ̶t̶o̶o̶ ̶(̶c̶h̶a̶n̶g̶e̶ ̶i̶n̶ ̶P̶M̶ ̶o̶f̶ ̶T̶h̶a̶i̶l̶a̶n̶d̶,̶ ̶B̶i̶t̶c̶o̶i̶n̶ ̶p̶r̶i̶c̶e̶s̶ ̶a̶t̶ ̶m̶u̶l̶t̶i̶p̶l̶e̶ ̶d̶a̶t̶e̶s̶,̶ ̶S̶P̶5̶0̶0̶ ̶g̶o̶i̶n̶g̶ ̶u̶p̶ ̶o̶r̶ ̶d̶o̶w̶n̶,̶ ̶w̶i̶n̶n̶e̶r̶ ̶o̶f̶ ̶W̶i̶m̶b̶l̶e̶d̶o̶n̶,̶ ̶p̶r̶o̶b̶a̶b̶l̶y̶ ̶o̶t̶h̶e̶r̶s̶)̶.̶ ̶T̶h̶e̶ ̶f̶a̶c̶t̶ ̶t̶h̶a̶t̶ ̶t̶h̶e̶y̶ ̶g̶e̶t̶ ̶a̶l̶l̶ ̶o̶f̶ ̶t̶h̶e̶s̶e̶ ̶r̶i̶g̶h̶t̶ ̶m̶a̶k̶e̶s̶ ̶m̶e̶ ̶w̶o̶n̶d̶e̶r̶ ̶i̶f̶ ̶t̶h̶e̶y̶ ̶r̶e̶a̶l̶l̶y̶ ̶a̶r̶e̶ ̶j̶u̶s̶t̶ ̶a̶ ̶g̶r̶e̶a̶t̶ ̶p̶r̶e̶d̶i̶c̶t̶o̶r̶.̶ I was reading the trades ordered by profit, so only the successes were showing. Order by date to see Magamyman's failures. Thanks @stevenwaterman for catching this.

    [0] https://polymarket.com/event/khamenei-out-as-supreme-leader-...

    [1] https://snipboard.io/DP1MWK.jpg

    [2] https://polymarket.com/profile/%40Magamyman

    • StevenWaterman 1 hour ago
      [2] Is sorted by profit/loss high to low, so you're seeing the first page of highest gains only, which is why it looks like he's always right. If you sort alphabetically / by date then there are losses
    • gruez 1 hour ago
      >> Ayatollah Ali Khamenei was not, it’s safe to assume, a devoted Polymarket user. If he had been, the Iranian leader might still be alive. Hours before Khamenei’s compound in Tehran was reduced to rubble last week,

      Or you know, be in a bunker dug into the mountains somewhere, rather than being in your official residence? He was a 86 year old man faced with the prospect of living the rest of his life in a bunker, so there's a good chance he wanted to die a martyr.

      • bawolff 42 minutes ago
        It wasnt just that he was in his official residence, he was having a high level meeting with other senior members of the Iranian government. It seems likely the war started early (normally america strikes in the middle of the night) simply because all the people they wanted to assainate were all in one spot above ground and that was too good an opportunity to pass up.

        Its really hard to imagine why anyone would do something that stupid when america just parked an aircraft carrier off your coast and looks to be spoiling for a fight.

      • mkoubaa 8 minutes ago
        He unequivocally stated on many occasions that he wanted to die a martyr
  • LucasGenoud 1 hour ago
    I think it's safe to say that beside national security risks. Allowing unrestricted betting on pretty much anything in the world is just not something we should have...
    • rvz 56 minutes ago
      Third order effect on post-AGI economics when those with expensive mortgages lose their jobs to AGI, can no-longer afford them, burn through their savings and get wiped out in a financial market crash because most of them used their RSUs to get mortgages for their homes, which now does not make any sense today.

      Then gambling on prediction markets, stocks, crypto etc will be the new normal.

      This is post-AGI.

  • A_D_E_P_T 1 hour ago
    Betting was once a vice overseen by the mob -- and those addicted to it were rightly viewed as pathetic figures, akin to serious alcoholics. Now betting pervades nearly every aspect of Anglosphere life. This transformation, which has taken place over the past 100 years but has really picked up steam over the last 15, has not been an improvement. It's net negative for society, and the evidence on this is very clear.

    Prediction markets are the worst and most insidious manifestation of this phenomenon. They reward insider trading and may also induce people to seek outcomes that are undesirable for society at large. (e.g. in tfa.) There's literally no way this experiment ends well -- which is to say that there's no way this ends in "markets" that benefit and enlighten the common man.

    I look forward to the pendulum swinging the other way. Even with such a broken political system, it might.

    • givemeethekeys 1 hour ago
      Yet another side effect of being automated out of a purposeful life.
      • wutwutwat 1 hour ago
        The purpose of life is work?
        • denkmoon 37 minutes ago
          Purposeful work. Like improving your community or living space. Decidedly not performative rituals at the widget making factory to make some rich guy even richer.
        • umanwizard 58 minutes ago
          Pretty much, yeah. A lot of people don't just want to consume, they derive self-esteem from doing something that is useful for others.
  • jMyles 1 hour ago
    This presumes that the nation's security is bolstered by the government's ability to keep secrets. It strikes me that, even if this is true in some ways, the opposite is true in others.
  • mcs5280 1 hour ago
    It's 100% legal if you're in the inside circle
    • rubyfan 1 hour ago
      Just because it’s not enforced doesn’t make it legal.
  • _3u10 1 hour ago
    Pretty sure war thunder forums still take the cake on that one. The lulz motive is far higher than the profit motive.
  • Analemma_ 1 hour ago
    I said this in another thread, but if you were to ask me "what is the biggest 180 you've made on some political or policy question in the last decade", it would for sure be prediction markets. I used to be all-in on the idea after reading Caplan, Taleb etc.: make people have "skin in the game" on a grand scale and we can have better predictions and better policy! But what a disaster they've been in practice: it's just a new avenue for government corruption and ruining your life with gambling. And now apparently a nat-sec problem as well.
    • Smar 1 hour ago
      Maybe the employees are only copying their leaders.
  • behole 1 hour ago
    Just another grift for orange man and his posse. https://www.msn.com/en-us/money/markets/anonymous-polymarket...
    • quakeguy 1 hour ago
      I always wonder about when there is a cutoff about the grift, i mean there has to be a point when enough is enough. Who cares if its 4 or 5 billions in the end, thats more money one could reasonably spend in a lifetime. What drives this greed?
      • i7l 1 hour ago
        Power. People who want power need status, and money is the ultimate symbol. They can never have enough power because of their dark triad personalities.
      • ivell 1 hour ago
        If I understand Trump, he wants to be the richest man in the world. It is another matter if can achieve that. But his ego would definitely want that.
  • ReptileMan 59 minutes ago
    > Ayatollah Ali Khamenei was not, it’s safe to assume, a devoted Polymarket user. If he had been, the Iranian leader might still be alive. Hours before Khamenei’s compound in Tehran was reduced to rubble last week, an account under the username “magamyman” bet about $20,000 that the supreme leader would no longer be in power by the end of March.

    Good thing that Polymarket gives such a good signal unlike such subtle clues as carrier group movements.

  • actionfromafar 1 hour ago
    These are scraps, so far. Now, what could you do if you had access to both markets and the Executive? About 4 billions, it would seem.
  • Dig1t 40 minutes ago
    You could just watch the movement of tankers and jets to the middle east on flight trackers. It was extremely easy to see this coming.

    Note: the owner of the Atlantic has ties to Epstein and Israel. They are extremely biased on anything to do with this war in Iran.

  • llm_nerd 32 minutes ago
    Apologies for going in the weeds on a general concept that is 100% valid, but it expends a couple of paragraphs on this so I must-

    "Ayatollah Ali Khamenei was not, it’s safe to assume, a devoted Polymarket user."

    We have to assume that he made the choice to be a martyr. He was in his own home at the same time that the entire world could see the enormous buildup of resources the US was placing in the area. Trump did exactly the same tired "will he or won't he" that he has done for various other actions.

    An attack was the most obvious event on the planet. This isn't some magical ret-conning, but anyone with a functioning brain could predicted the outcome.

    I think the Polymarket angle to this is more that people were betting on whether he would choose existence over martyrdom. He could have hidden in countless places and sent various tirade videos for years, Osama-style, but this 86 year old man just decided to wait for the bombs.

    And on Venezuela, anyone who thinks that was just a fantastically successful op is not rational. Clearly Trump had buy-in by either the Russians -- in return for some favours on Ukraine -- or various members in the Venezuela military (or most likely of all, both). Seeing several CH-47s flying over an entirely predictable target area utterly guarantees this.

    Venezuela was a coup that levered the US military to fulfil it cleanly. With absolutely and complete certainty.

    • spiderice 21 minutes ago
      > We have to assume that he made the choice to be a martyr

      I don't think we have to assume that. He could have thought the military build up was a bluff. He could have trusted in Iran's defenses to allow him time to find safety. He could have thought his assassination attempt on Trump would pan out. There are a million other could-have's that we could invent, and I don't think "him choosing to be a martyr" is any more (or less) valid than the rest of them.

      • llm_nerd 9 minutes ago
        >He could have thought the military build up was a bluff.

        Everyone knew the US was attacking. Iran clearly knew as well.

        >He could have trusted in Iran's defenses to allow him time to find safety

        Everyone knows what Tomahawks are by now. Everyone knows that the first sign of an attack will be things blowing up around you. Further both Israel and the US have repeatedly performed airstrikes throughout Iran with impunity, including just a few months earlier with zero resistance. No, there is no rational situation where Iran thought their defenses would give cover for an old man in his own palace.

        It's infinitely more valid of a supposition to assume he martyred himself.

        Weird how this offends some people. It's especially hilarious when we have the classic "Mossad super-masterful strokes figured out that old man was...in his own home"

        Like if the US, through masterful intelligence and a giant bunker buster, caught him in some underground complex, then sure. That isn't what happens.

  • aaron695 1 hour ago
    [dead]