Authorities in Israel have arrested and indicted two individuals accused of using confidential information to place bets on the prediction platform Polymarket concerning a potential Israeli strike on Iran.
In a joint statement issued Thursday, the Israel Defense Ministry, the internal security agency Shin Bet, and national police said a military reservist and a civilian were taken into custody following an investigation. Officials allege the reservist accessed classified material and used it to inform the betting activity. Authorities added that the reservist had been serving with Shin Bet.
Prosecutors plan to file criminal charges tied to national security violations, bribery, and obstruction of justice.
Prediction markets have faced growing scrutiny this year amid insider trading controversies. In one high-profile case, a Polymarket user profited roughly $400,000 by correctly predicting that Nicolás Maduro would be removed from power shortly before he was apprehended by U.S. forces.
Last month, the Israeli public broadcaster Kan reported that a Polymarket account under the username “ricosuave666” placed multiple wagers related to Israeli military actions in Iran in June 2025. It remains unclear whether the detained suspects were connected to that account.
The account allegedly staked tens of thousands of dollars and earned more than $152,300 in profits. Among the markets it bet on were “Israel strike on Iran on June 24” and “Israel military action against Iran by Friday,” with the latter reportedly yielding gains exceeding $128,700.
Prediction markets can pose security risks when abused
Lawmakers around the world have warned that prediction markets may be vulnerable to exploitation by individuals with insider knowledge, raising concerns about market integrity and weakening public trust.
Israel’s Ministry of Defense said wagers placed using classified information present a “real security risk for Israel Defense Forces activity and national activity.” The ministry added that the country’s military, security services, and police will continue taking action against anyone who unlawfully uses confidential information.
An attorney representing the reservist told Bloomberg that the indictment is “flawed,” adding that the allegation of harming national security has since been withdrawn.
