Gamblers can now bet on the outcome of wars – and that’s a problem

The growing threat of conflict in the Middle East^[1] last week prompted a flood of activity in a little-known area of betting: prediction markets in which users can bet on a particular military action.

One user of the Polymarket betting platform^[2] won US$4,500 (A$6,350) by predicting the exact date of the United States striking Iran^[3].

In total, Polymarket users bet more than US$4 million (A$5.65 million) on the US-Iran strikes occurring on February 28.

We are academics who have researched international criminal and humanitarian law and emerging trends in geopolitics on social media platforms.

So, what is Polymarket, how do these platforms work, and what are the potential risks?

What is Polymarket?

Polymarket is a cryptocurrency-based prediction market^[4] that offers an extremely wide range of foreign policy events for users to bet on.

Its main competitor, Kalshi^[5], offers sports and policy bets, but not military bets.

The bets themselves are not gambling in a traditional sense, where the house sets the odds. Instead, it’s a contract^[6] where the price fluctuates much like shares traded on a stock exchange.

Users can suggest ideas for bets, but the bets are created^[7] by Polymarket.

The day-by-day US-Iran strike bet was accompanied by a series of other bets on the conflict, including:

• the possibility of Iran closing the Strait of Hormuz
• when US troops would enter Iran
• what targets Iran might hit.

Bets related to the current war in Iran^[8] totalled US$529 million (A$726 million).

Users can also gamble on the Russia-Ukraine war, using real-time war maps synchronised to the Polymarket app^[9] to inform their bets – the same maps Ukrainians check for survival.

All payments are made in cryptocurrency^[10].

Polymarket does not charge trading fees^[11], except on its 15-minute crypto markets. These are comparable to day-trading stocks – users have to trade them swiftly for financial gain.

Instead, it has been reported the business model^[12] relies on the sale of the data^[13] generated on the platform.

While Polymarket hasn’t revealed whether it sells the data it collects, in other financial contexts, data is a valuable commodity. It is regularly sold^[14] to policymakers, advertisers and researchers.

The Conversation contacted Polymarket for comment but did not receive a reply before this article’s deadline.

Bans and grey areas

Polymarket was launched^[15] in the US in 2020 but it was banned for American users from 2022–25. The Commodity Futures Trading Commission^[16] found it to be non-compliant with gambling legislation.

More than 30 countries reached similar findings and banned the platform, with some such as Australia geoblocking^[17] the site.

Polymarket argued it is not a gambling^[18] company because the odds are set not by the house, but by user-determined probability contracts.

This argument was favourably received by the 2025 Trump administration, which overturned the ban^[19].

Donald Trump Jr^[20] is a major investor in Polymarket, a strategic advisor to Kalshi, and the director of an upcoming expansion to the Truth Social universe: Truth Predict (another prediction market).

The bets on offer on these platforms raise a host of legal, political and moral questions.

Benefiting from misery

Users are betting millions of dollars on what they believe to be the probability of the US striking Iran or the likelihood of a particular city of Ukrainian civilians being captured by Russian forces.

These gamblers stand to benefit financially from the pain of innocent civilians.

Reducing complex military decisions to a yes/no gamble dehumanises the civilians trapped in the conflict and potentially paves the way for malicious activity.

What if an official in power was influenced by the bets they or their constituents had placed when deciding precisely when to bomb another country?

What if it was revealed after a military strike that a decision-maker personally profited from the choice to press the button on a specific date, or to use a specific weapon for the strike?

Concerns about inside information

This is not as far-fetched as it sounds. Several Israeli soldiers are currently under arrest^[21] and are facing an internal investigation for allegedly using classified information to inform their bets on Polymarket about strikes Israel would or would not pursue.

The case^[22] of a man winning US$400,000 (A$570,000) just hours after placing a correct bet on when the US would capture Venezuelan President Nicolas Maduro^[23] has led to speculation of misuse of insider information.

Polymarket is designed to minimise transparency regarding who places what bets and based on what information.

Polymarket claims to offer anonymity to users^[24] but corruption allegations against a few mysteriously lucky bettors indicates that in some cases, users may be identified.

The value of data

The value of the data generated depends on who is buying it and what value they place on it.

Data from bets on US military action in Iran might attract a higher price from states in the region than data on the expected likelihood of a hurricane in South Carolina.

Polymarket might, therefore, issue more bets on extreme events that attract attention.

This, combined with the anonymous design, makes it a potentially dangerous tool of information warfare: very little prevents hostile actors from placing bets and polluting the public discourse.

A foreign state could place bets on the odds of a war in their interest, for example. This can change the public discourse and additionally impact the values of the bets, with financial implications for the other gamblers.

Further, by monitoring what bets are available, a hostile state can assess what issues to sew disinformation into.

How Polymarket manages its data is unknown. It is unclear what data specifically Polymarket stores, to whom it is sold and in which configurations, and what the data is used for by the purchasers.

But selling data^[25] on the public’s expectations of war requires much more scrutiny.

References

1. ^{^} conflict in the Middle East (theconversation.com)
2. ^{^} Polymarket betting platform (polymarket.com)
3. ^{^} United States striking Iran (polymarket.com)
4. ^{^} prediction market (www.britannica.com)
5. ^{^} Kalshi (kalshi.com)
6. ^{^} contract (help.polymarket.com)
7. ^{^} bets are created (help.polymarket.com)
8. ^{^} current war in Iran (www.afr.com)
9. ^{^} real-time war maps synchronised to the Polymarket app (warontherocks.com)
10. ^{^} cryptocurrency (help.polymarket.com)
11. ^{^} trading fees (docs.polymarket.com)
12. ^{^} the business model (homebusinessmag.com)
13. ^{^} sale of the data (www.sportico.com)
14. ^{^} regularly sold (homebusinessmag.com)
15. ^{^} launched (reason.com)
16. ^{^} Commodity Futures Trading Commission (www.cftc.gov)
17. ^{^} geoblocking (www.acma.gov.au)
18. ^{^} not a gambling (www.trendingtopics.eu)
19. ^{^} which overturned the ban (www.pbs.org)
20. ^{^} Donald Trump Jr (www.nytimes.com)
21. ^{^} arrest (www.npr.org)
22. ^{^} The case (ritchietorres.house.gov)
23. ^{^} capture Venezuelan President Nicolas Maduro (www.reuters.com)
24. ^{^} offer anonymity to users (www.nytimes.com)
25. ^{^} selling data (www.sportico.com)