A Prediction Market Participant Made $436K on Wagers Predicting the Ouster of Maduro.
A trader profited close to $500,000 on the ouster of Venezuela's president immediately preceding it was publicly declared, raising questions about potential gains made from non-public details of the event.
Sudden Shift in Wagers
Wagers on Polymarket, an online prediction market, that Nicolás Maduro would be out of power by the month's conclusion rose in the hours before Donald Trump declared on Saturday that the Venezuelan leader had been apprehended.
A single trader, which became a member recently and made four bets, all on political events in Venezuela, made more than $436K from a starting bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Odds Fluctuate Before Announcement
Trading information shows that traders put the odds of a political change at just 6.5% in the midday period of Friday, January 2nd.
But the odds had increased to 11% by late Friday night and skyrocketed in the morning of January 3rd, suggesting a sudden change in positions just before the public announcement was made.
"This particular bet has all the signs of a bet based on inside information," commented a financial reform advocate.
Several of other individuals also profited significant sums from predicting the capture.
Regulatory Scrutiny Emerges
Some lawmakers are growing concerned.
Proposed legislation introduced on Monday would prevent public officials from placing bets on prediction markets if they have "material nonpublic information" related to a market.
The Prediction Market Landscape
Prediction markets have grown significantly in the past few years, with users able to predict everything from sports to political events.
This sector faced scrutiny under the Biden administration. But it has found a more favorable environment during the Trump presidency.
Trading on insider information is against the law in the traditional financial markets, but there are fewer regulations in the event betting space.
An official representative for a competing service said their site "explicitly prohibits insider trading of any form."
