Israeli military reservists and a civilian are suspected of using classified information to bet on Israeli military operations on an online prediction platform, prosecutors said on Thursday.
Several people have been arrested in the case, and two of them — a reservist and the civilian — were charged this week with crimes including obstructing justice, bribery and “serious security offenses,” the Israeli state attorney’s office said.
The charges came an investigation by the Israeli police, the military and the domestic intelligence agency Shin Bet into suspected gambling “based on classified information to which the reservists were exposed by virtue of their role in the army,” the Israeli authorities said.
The bets were placed on Polymarket, a popular prediction platform.
The identities of those arrested, as well as details about the bets and the investigation, remained confidential under a gag order. The Israeli authorities did not specify which operations the bets were connected to, but the military said “no operational harm” had been caused.
The Israeli military said in a statement that it “views with great seriousness any act that endangers the security of the state, and in particular the use of highly classified information for personal gain,” calling such actions “a serious ethical lapse.”
Concerns are rising globally about the use of insider information to trade on platforms like Polymarket, which says it is “the world’s largest prediction market.” Regulators and lawmakers in multiple countries are wrestling with the popularity of betting platforms that double as forecasting tools.
Prediction platforms lack many of the guardrails against insider trading that exist on traditional financial markets, and they have faced criticism for allowing those with insider knowledge to profit from it.
“If you’re an expert on a certain topic, Polymarket is your opportunity to profit from trading based on your knowledge, while improving the market’s accuracy,” according to the company’s website.
This is precisely what has made such platforms popular and potentially problematic.
Almost anything can be the subject of a trade, including the timing or location of a military operation, and the rising popularity of online prediction markets means that the odds they generate are increasingly seen as valuable signals of pending political, financial and other news. News outlets like CNN, CNBC and The Wall Street Journal have partnered with the platforms to use their data.
But the accuracy of some highly specific bets has raised alarms about the use of inside information, including this week, when an anonymous account on Polymarket correctly bet on many aspects of the Super Bowl halftime show, including mystery guests.
In January, just before U.S. troops captured President Nicolás Maduro of Venezuela, an anonymous user on Polymarket bet that Mr. Maduro would fall and made about $400,000 on the prediction, despite the seemingly long odds. The winnings raised questions about whether a government official had used confidential knowledge for personal profit.
Israel’s public broadcaster, Kan, last month reported that an anonymous user correctly bet tens of thousands of dollars last summer on the timing of an Israeli attack on Iran and the conclusion of military operations there. The accuracy of those predictions raised alarms about the possible exposure and misuse of classified information, prompting discussions among the military and the Shin Bet, Kan reported.
Polymarket did not immediately respond to a request for comment.
Natan Odenheimer contributed reporting from Tel Aviv.
Ephrat Livni is a Times reporter covering breaking news around the world. She is based in Washington.
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