The Venality of Evil

Insider traders using prediction markets to profit from war and death

As the U.S. concluded last week that it would invade Iran by Saturday, there was a sudden surge in wagers on sites where you can bet on political outcomes.

On Polymarket last Friday, more than 300 bets of at least $1,000 correctly predicted an American strike on Iran by Saturday, according to the New York Times, far exceeding the number of these bets for the rest of the month combined.

This is the most despicable kind of insider trading: People who knew we were likely to attack Iran “won” hundreds of thousands of dollars, maybe millions, by using this information to place bets.

More than 100 little girls are dead after their school was bombed, and these unscrupulous bettors are counting their blood-stained winnings.

Iranian schoolgirls in Rick Steves’ 2009 documentary about Iran, photo from RickSteves.com

At least 16 accounts that placed bets Friday, predicting a strike by Saturday, profited by more than $100,000, according to the Times’ analysis. More than 100 accounts made more than $10,000.

“Immorality on steroids”

U.S. Sen. Chris Murphy (D-Conn.) has called these markets “insane” and said it’s likely that people making military decisions had a financial stake in whether the U.S. would attack Iran and when the first strike would occur.

“This is American commercial immorality on steroids,” Murphy told the Washington Post.

“Once events that involve good and evil simply become a financial product, I don’t know how right and wrong matters any longer. … People shouldn’t be rooting for people to die because they placed a bet.”

Because Polymarket and other prediction-site accounts are anonymous, it’s virtually impossible to identity who is wagering.

One thing we know: the president’s son, Don Jr., is a member of Polymarket’s advisory board.

Prediction sites offer propositions and set odds based on how many people want to bet each way. So people are betting against one another – the site doesn’t lose when insiders game the system.

Bubblemaps noted that “six suspected insiders” made $1.2 million betting on a U.S. strike on Iran.

Major site freezes payouts

Another leading prediction site, Kalshi, froze payments to those who’d bet that Iran’s Supreme Leader would be “out as Supreme Leader” by dates in March or by April 1.

Shortly after Khamenei was killed, Kalshi froze the $54 million in this market saying it prohibits payouts “directly tied to death.”

Did Kalshi not consider that Khamenei would likely be killed in a U.S. attack? As sick as it is, that’s what most people were betting on.

For now the “winners” aren’t getting paid by Kalshi, though they can get back the value of their bets. I wonder if the losers are getting their money back.

As bombs exploded and innocents died, one Kalshi user told the Washington Post: “I was booking my trip to Courchevel,” the French ski resort. “Then they changed the rules … and everybody got screwed.”

Kalshi users sound far more furious about not getting paid than they do about an unnecessary war with a death toll climbing above 1,000 people.

Jesus Martinez wrote on X that he planned to close his Kalshi account: “The precedent set today, not honoring users & hurting a major market in its only possible outcome is gross. … You owe me $2,500+ & you owe many innocent, casual traders millions more.”

This isn’t the first time. Last January, a Polymarket bettor won about $400,000 by predicting the timing within hours of Venezuelan President Maduro’s capture. There’s no proof this bettor had insider info, but it appears highly likely.

We’re living under a president who not only flouts ethical standards, he trumpets them.

A free billion-dollar aircraft from Qatar, bring it on! Making billions more brokering crypto, that’s the art of the deal! Selling pardons for donations, that’s how the world works, kid.

But now we have political and military leaders who could be incentivized to start wars. We already appear to have sharing of insider info by members of this administration, possibly to family members, friends and/or cronies.

This constant assault on our sensibilities is intentional: the elimination of environmental protections, the war on vaccines, the destruction of alternative energy projects, even the demolition of a storied wing of the White House.

We’re exhausted which makes it’s harder to fight. But fight we must. We can’t fix everything, but we can do something.

One small thing: we can watch Rick Steves’ documentary about Iran, which is free on YouTube.

“I believe if you’re going to bomb a place, you should know its people first,” Steves says. “Even if military force is justified, it should hurt when you kill someone.”

Notes

As many of you have surmised, my headline is a riff on Hannah Arendt’s book “The Banality of Evil.”

Though some believe “venal” means vain, it means corrupt. Merriam-Webster defines “venal” as “capable of being bought” and “open to corrupt influence and especially bribery.”