Comment Text:
The Anti-Corruption Data Collective
A fiscally sponsored project of The Fund For Constitutional Government
1100 13th Street NW
Suite 800
Washington, DC 20005
Attn:
Chairman Michael Selig
Commodity Futures Trading Commission
Three Lafayette Centre, 1155 21st Street NW,
Washington, DC 20581
RIN 3038-AF65
30 April 2026
Dear Chairman Selig,
The Anti-Corruption Data Collective (ACDC) is a nonprofit, non-partisan collective of academic researchers, data scientists, policy experts and investigative journalists working together to expose and oppose corruption and the harm it causes to people, politics and the planet. (www.acdatacollective.org)
We appreciate the opportunity to submit a comment on the Commission's Advanced Notice of Proposed Rulemaking on Prediction Markets. We welcome the Commission’s attention to this urgent matter.
Alarmed by media reporting on cases of suspicious wagers and potential insider trading on prediction markets, ACDC recently conducted a comprehensive analysis of all settled markets on Polymarket for signs of insider trading.
The full report can be downloaded here: https://acdatacollective.org/wp-content/uploads/2026/04/Insider_Risks_in_Polymarket_Political_Markets_ACDC.pdf
We have also attached the report to this comment.
The most salient points and recommendations for CFTC rulemaking are summarized below.
As an anti-corruption organization, our analysis focuses primarily on political markets, where insider trading clearly corresponds to the leading definition of corruption: “the abuse of entrusted power for private gain.”
Analyzing 400,000 markets on Polymarket from 2021 to the first 10 weeks of 2026, we find:
Political markets account for only 4% of markets in number, but over ⅓ of the volume of wagered: $19.7 billion in total.
Longshot bets, which we define as bets of over $2500 priced at 35c or lower, are successful only 14% of the time overall, but are far more successful in political markets (25%).
Within types of political markets, military and defense markets return a shockingly high proportion of successful longshot bets: 52%, far above the expected level, and indicating widespread insider trading. There is also a noticeable spike in successful longshot betting just before these markets resolve, with more longshot bets placed on the winning outcome than losing outcome in the twelve hours before the market closed.
$35 million in successful longshot bets have been wagered on political markets on Polymarket. Of this, $9 million was placed in the first 10 weeks of 2026 alone.
Our report presents a new case study on the US strikes against Iranian nuclear facilities in June 2025. Eight wallets placed winning longshot bets across these markets. Combined they won $1.8 million in profit, with one wallet earning nearly $500,000.
The enormous scale and rapid growth of the problem requires a systemic regulatory approach. Our analysis indicates that recent cases such as the active duty soldier alleged to have leveraged classified information to profit on Polymarket are merely the tip of an alarming and multi-million-dollar iceberg.
We urge the CFTC to swiftly pass rules or regulations that declare contracts on certain events contrary to the public interest. Prohibiting types of markets will be more effective and a better use of resources than relying solely on law enforcement and platforms to police individual users or investigate their connections to the subject of markets.
In particular, we urge the Commission to prohibit the exchange of prediction market contracts on events related to military and defense operations, where the indicators of insider trading are the strongest.
As noted in the ANPRM Request for Comments, the CFTC has the authority to determine that contracts involving war or assassination are contrary to the public interest. The CFTC should use this authority swiftly.
In addition to incentivizing corrosive corruption in the nation’s military, the insider trading indicated by our analysis has deeply alarming national security implications. As noted by the Financial Times on April 30, 2026, ACDC’s research “is likely to add to growing concerns among regulators and lawmakers about insiders placing bets on the timing and success of military actions, amid fears that this could reveal classified information in advance.”
Moving beyond military events, markets in which public officials and government employees with insider knowledge can exploit an unfair advantage to profit at the expense of ordinary users clearly do not serve the public interest. Therefore, the Commission should move quickly to pass rules and regulations that prohibit the exchange of prediction market contracts on all political events that are determined by individuals and small groups or institutions.
Across Polymarket, markets resolved on outcomes determined by groups or institutions present the highest insider trading risk across three key indicators: longshot bet success rates, highly successful wallets, and well-timed bets.
The Commission should carefully consider extending such regulation to non-political events. While corruption risks apply most clearly in political markets, these are not the only ones at risk of insider trading.
Our analysis finds:
Sports markets have seen almost a doubling in the success rate of longshot bets (9.4% vs 5.2%). Sports is the category with the largest volume of winning longshot bets in the first ten weeks of 2026.
Culture markets produce the highest proportion of successful longshot bets (29.2%) overall. Many culture markets, such as on award winners, have group outcome makers that could be susceptible to insider trading.
In contrast, markets determined by public outcome-makers, such as electoral contests, carry the lowest risk of insider trading. Our analysis finds that longshot bets on political public-outcome-maker markets align with expectations at 19.3%.
We remain available to discuss our findings and their implications for possible CFTC rulemaking in more detail.
Kind regards,
Michael Hornsby, Co-Director
David Szakonyi, Co-Director, Co-Founder
Michelle Kendler-Kretsch, Research Fellow
