Israel Arrests Two for Using Secret Military Data on Polymarket Prediction Market

TLDR

• Israeli authorities arrested a military reservist and a civilian for allegedly using classified information to bet on Polymarket about military strikes on Iran
• The reservist worked for Shin Bet and obtained secret information to place the bets
• A Polymarket user “ricosuave666” reportedly earned over $152,300 betting on Israel’s military operations in Iran in June 2025
• Prosecutors will pursue criminal charges for security-related offenses, bribery, and obstruction of justice
• Israeli officials called the use of classified information for betting a “real security risk” for military operations

Israeli authorities have arrested two people for allegedly using classified military information to place bets on Polymarket. The arrests involved a military reservist and a civilian who worked with Shin Bet, Israel’s internal security agency.

The joint statement from Israel’s Defense Ministry, Shin Bet, and police said the reservist obtained classified information during military service. That information was then used to place bets on prediction markets related to Israel striking Iran. The prosecutor’s office plans to file criminal charges including security-related offenses, bribery, and obstruction of justice.

The arrests follow reports in Israeli media about suspicious betting activity on Polymarket last year. A user named “ricosuave666” placed several bets related to Israel’s military operations in Iran in June 2025. Israeli state-owned news outlet Kan reported the account wagered tens of thousands of dollars on markets about Israeli military strikes.

The account reportedly won over $152,300 from these bets. One winning bet on “Israel military action against Iran by Friday” earned over $128,700 alone. The account correctly predicted the timeline around a 12-day war between Israel and Iran.

It remains unknown if the arrested individuals are behind the ricosuave666 account. Israeli officials did not specify which Polymarket accounts were under investigation. The account went dormant for six months after the initial winnings before resuming trading last month.

Security Concerns Over Prediction Market Misuse

Israel’s Ministry of Defense issued a warning about the security risks posed by such betting activity. Officials said bets based on secret information create “real security risk for Israel Defense Forces activity and national activity.” The ministry stated that military, security, and police units will continue pursuing anyone who illegally uses classified information.

A lawyer representing the reservist told Bloomberg the indictment is “flawed.” The attorney also noted that the charge of harming national security has been dropped from the case.

Prediction markets allow users to bet on future events ranging from political outcomes to sports results. Advocates argue these markets provide valuable insights by giving people financial incentives to share knowledge. Critics view them as gambling platforms that encourage misuse of sensitive information.

Growing Insider Trading Controversies

This marks the first known arrest for insider trading on a prediction market platform. Several U.S. lawyers specializing in prediction markets confirmed they were unaware of any previous arrests. The Israeli case comes after multiple insider trading controversies hit Polymarket in recent months.

In December, a trader made $1.2 million with accurate bets on Google’s most-searched people in 2025. Another bettor earned over $400,000 after wagering that Nicolás Maduro would be removed as Venezuela’s president. That bet was placed less than five hours before the operation that captured him.

Kalshi, Polymarket’s main competitor, recently expanded its market-surveillance program to identify insider trading. Co-founder Tarek Mansour said Kalshi has referred several cases to law enforcement. Polymarket did not respond to requests for comment about the Israeli arrests.

Israeli military activities remain popular betting topics on Polymarket. Over $3 million has been wagered on “Israel Strikes Iran” markets with deadlines through June 2026. The platform also hosts bets on U.S. military strikes against Iran, with trading volume exceeding $238 million for that question.

The market currently shows 53% probability that the U.S. will strike Iran before the end of June. Users have placed over $12 million betting on a U.S. strike by February 28, with the market giving that outcome a 16% probability. The Pentagon has told a second aircraft carrier strike group to prepare for deployment to the Middle East.

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