When American forces snatched the now-ousted Venezuelan president Nicolás Maduro from Caracas a little over two weeks ago, it came at an inflection moment in U.S. gambling (or trading, whatever) history.
Basically, the rest of the country — your mom, your kids, your Aunt Gertie — had discovered Kalshi, and they’ve heard of Polymarket, and both sites were all over the place all of the time. From a 60 Minutes puff piece on Poly and Kalshi being part of the daily CNN broadcasts to live Polymarket odds during the Golden Globes … well, it’s safe to say the whole prediction market thing has burst into the mainstream.
Which is why it became news after someone made a small fortune when Maduro was captured. That someone created a Polymarket account, put $30,000 down on Maduro being out of office by the end of January, and pocketed over $400,000 on the deal.
“Insider trading!” yelled just about everyone, including Democratic Rep. Ritchie Torres of New York, who pretty much immediately dropped a bill, called the Public Integrity in Financial Prediction Markets Act of 2026, which would ban government officials, appointees, employees, and the rest from profiting in prediction markets on inside info.
Of course, there’s the other side to this, the side that claims insider trading is the whole point of the exercise. Those people include Polymarket founder and CEO Shayne Coplan, who said at Axios’ annual BFD Summit, “Nobody is under the impression that nobody knows the answer, right? Like, of course, there’s people who are working on it that know when it’s going to come. And I think what’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market and the market to change, and all of a sudden it’s trading at 95 cents.”
For the record, Kalshi’s co-founder and CEO Tarek Mansour is not exactly pro-insider trading, noting it goes against Kalshi’s rules, and he actually came out in support of Torres’ bill.
But besides gambling on foreign leaders getting the boot, you can also bet on what MrBeast will say in his next video. Or who might host Saturday Night Live this season. Or what words officials of American Airlines will utter during their next earnings call. Or when xAI will release Grok 4.2. Or will Apple release a Macbook with cellular connectivity before 2027. And on and on and on and on and on with markets where someone, somewhere knows the answer.
Or when hundreds of people do.
Like what happened to MS NOW’s Chris Hayes. Hayes appeared on the Late Show with Stephen Colbert two weeks ago. The show was taped around 5:30 p.m., to be broadcast some seven hours later. Within an hour, a market was up on Kalshi. The market? What will Hayes say on Colbert. Which, of course, was already taped. In front of Colbert and crew. And a few hundred audience members.
Which brings me to my little modest proposal: Don’t ever — as in ever — buy contracts on anything where the outcome is potentially already known by someone else.
Put simply: Would you buy a “heads” contract at 50 cents if you knew the person on the other side might already know the trade will settle at “tails”? Of course you wouldn’t. You wouldn’t buy it at 49 cents either. Or 48, 47, 46 …
So many bad gamblers
Captain Jack Andrews, professional sports bettor and co-founder of Unabated, doesn’t think the prediction market boom is necessarily a bad thing. He just thinks most people are going to get wrecked.
“It’s the gamification of America. We’re on this pathway toward everything being a gamble and I don’t necessarily disagree with it,” he said. “I just don’t know if it’s healthy, because a lot of people are really bad gamblers out there.”
The problem, as Andrews sees it, is simple. Especially when it comes to things like mention markets, which are so easily manipulatable.
“It’s rigged gambling,” he said.
Been there, lost money on that
Bernard Marantelli has watched this story play out before. The Australian-born professional gambler and betting entrepreneur, best known for co-founding Colossus Bets and White Swan Data (and for taking down the Texas Lottery), saw European markets go through the exact same growing pains more than a decade ago.
“It’s funny. We’re dealing with everything in America now like Europe didn’t exist 20 years ago, but they went through all of these problems exactly the same,” he said.
His example: In-play tennis and horse racing markets in the UK.
“When they came along, everyone was enamored with them. ‘Oh, it’s fantastic. I can bet my horse at the start of the race, and during the race I can trade it or buy more or whatever,’” Marantelli said. “Well, they just had no idea that they were four seconds behind, or that their horse had fallen. What really happened in both of those environments is that the market died, because the retail people got killed. Completely destroyed.”
The Maduro bet fits the pattern perfectly. Marantelli ticked off the red flags.
“It’s a new account, it’s the only trade, probably never trade again,” he said. “Who knows if they’ve done AML/KYC on it? Who knows if it was Donald Trump or a paratrooper on the airplane or whatever?”
Professionals know to stay away from markets where that kind of information asymmetry is likely to exist, when they don’t know which end is up. Retail bettors walk right in.
Marantelli thinks the platforms should know better. “If they allow that to happen, ultimately it damages their business more than anybody’s. I think in some senses, they should self-police. Now, it’s reasonably likely that they’re not smart enough to realize they should self-police or don’t see the urgency in it.”
He sees the warning signs already.
“I think it’s borderline dangerous for them. I think some people will say, ‘F**k it, I’m not going to trade these obscure markets again,'” Marantelli said. “There’s a canary in the coal mine.”
Eventually, he believes, the casual bettors will figure out the game is rigged. Then the whole ecosystem collapses.
“The whole premise of a healthy exchange, a healthy prediction market, a healthy sportsbook, a healthy bottle shop is reasonable consumption of a potentially problematic item,” he said. “You want people to lose within their means, with an appeal that they can win. If you start to have too many products that don’t achieve that, I think you damage your own business.”
But until that reckoning comes, the rules won’t change, leaving those outside the know inside the risk.
“If you sit down at a poker table and you can’t find the sucker, it’s you,” Marantelli said. “I think it’s the same thing all over again.”
Maybe it’s 50/50, but …
Much like a trade on Kalshi, there is certainly an “other side” to all this.
“The point of these markets is to get information, so the only reason you should ever be trading on them is if you think you have some information,” Robin Hanson, a professor of economics at George Mason University whose academic work helped give Mansour and Coplan the juice for their ideas, told Forbes. “People with more information should trade more and get more money, because that’s how they get paid for the information they contribute.”
“Porter,” a professional bettor who also makes markets on prediction market sites, agrees with Hanson, and then some. His argument is simple, if counterintuitive.
“In an event that’s rigged — and I keep saying ‘rigged,’ but what I really mean is there is inside information — you have one of two possible results. The market goes to zero or the market goes to 100,” he said. “That’s the same exact scenario that occurs in every regular market.”
His point: When you’re betting blind, you’re on the right side of the insider information roughly half the time.
“While it’s unethical and wrong, it doesn’t actually change EV,” Porter said. “I understand that you’re going to lose when it’s rigged against you, but people forget that half the time, they’re on the winning side.”
He’s not naive about what’s happening in these markets. He knows the mention markets are essentially being beaten by some with what amounts to past-posting.
“Someone is sitting at a press conference or has a really fast feed,” he said. “People do it with news. A satellite feed is slower. A cable TV feed is faster. So someone will hear Trump say a line and try to anticipate what he’s going to say next. It’s the same concept.”
And it’s not just speed. Porter knows someone who actively manipulated a Taylor Swift market, faking action in one market to move a more liquid one.
“There were two markets. One was something like, ‘Will she get pregnant?’” he said. “The idea was to fake action in one market to move the other market with more liquidity. And it actually worked.”
But Porter argues that information asymmetry exists everywhere, not just in prediction markets.
“Four years ago, Underdog would tell you LeBron [James] was out before sportsbooks updated. You could just go bet the other side,” he said. “This exists in every market. We’re just more familiar with it in sports.”
So where does that leave the casual bettor throwing money at whether MrBeast’s next video will be over 12 minutes?
“You’re entering that market knowing someone knows whether it’s heads or tails,” Porter said. “I understand it’s unethical. I understand it’s insider trading. I understand why it bothers people. I don’t understand how it negatively impacts the end user in practice.”
He compares the psychology to what he calls “broken-taillight syndrome.” If you see one broken taillight, it feels like everyone has a broken taillight. When in fact, most taillights are operating just fine.
“Once you notice it, you think you’re seeing it everywhere. But you forget all the times it went your way,” he said. “People remember every bad beat. They forget the miracle wins. Every single person will tell you they’re unlucky in sports betting.”
Still, Porter concedes there’s something to the emotional calculus, even if the math says you’re fine. “The negative outweighs the positive emotionally, not necessarily monetarily.”
Who’s the sucker?
Maybe Porter’s right about the math. But most people aren’t calculating EV when they throw $50 at a mention market; they’re trying to win. And when they lose to someone who already knew the answer, no amount of “well, statistically, half the time you’re on the right side” will make them feel better.
So here’s the modest proposal again: Don’t bet on markets where someone else might already know the outcome. Not at 50 cents. Not at 40. Not at 30.
Because if you can’t spot the sucker, you already know who it is.
