By Daniel Orton, Gabe Whisnant, and Andrew Stanton
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A U.S. Army special forces soldier charged with betting on the capture of Venezuelan leader Nicolás Maduro while allegedly holding insider information has been released on $250,000 bail, as new details emerge about how prediction market platforms handled his attempted trades.
Prosecutors say Gannon Ken Van Dyke used nonpublic information tied to the U.S. operation against Maduro to place wagers on Polymarket, ultimately netting more than $400,000. But according to a Reuters report, the soldier was blocked from opening an account on Kalshi, a rival, federally regulated prediction market, after attempting to do so several times around late December. A person familiar with the matter told Reuters that Kalshi prevented the account from being opened despite outreach to the platform’s customer support.
The contrast between the two platforms has drawn renewed attention to how emerging prediction markets police insider trading risks tied to government and military actions. Polymarket has said it cooperated with investigators, while Kalshi has previously emphasized strict screening requirements and regulatory oversight.
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The case marks one of the first times U.S. authorities have brought criminal charges tied to betting on geopolitical outcomes using alleged insider information. It also comes as prediction markets grow in popularity among traders seeking to wager on elections, conflicts and major policy decisions.
The investigation into Van Dyke is ongoing.
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Trump Says World: 'Somewhat of a Casino'
President Donald Trump on Thursday described the modern world as “somewhat of a casino” when asked about online prediction markets such as Polymarket, responding to questions about allegations that a U.S. soldier used classified information to place lucrative bets tied to a covert operation in Venezuela.
Speaking to reporters in the Oval Office, Trump said he was unaware of Van Dyke's case but pledged to “look into it,” adding that he is “not happy with any of that stuff” when pressed on whether federal employees should be betting on prediction markets.
Trump's Attitude Toward Prediction Markets
Trump compared the charges against Van Dyke to the baseball player Pete Rose “betting on his own team," and added that he was “never much in favor” of the “betting things” now going on worldwide.
The Commodity Futures Trading Commission (CFTC), under Trump, has taken a favorable stance toward prediction markets. In July, the agency dropped a Biden-era probe into whether Polymarket was functioning as an unregistered derivatives exchange.
The CFTC’s Trump-appointed chair, Michael Selig, has argued publicly that these platforms are financial markets rather than gambling and therefore remain subject to federal oversight rather than the less forgiving authority of states.
Trump’s family is also tied to two of the most prominent prediction markets. In January of last year, Donald Trump Jr. joined Kalshi as a strategic adviser. In August, he joined the advisory board of Polymarket, where his venture capital firm, 1789 Capital, made an undisclosed “strategic investment.”
Trump Media & Technology Group, the parent company of Truth Social, which is majority-owned by the president through a revocable trust, announced in October that it would enter the space and launch a crypto-based prediction market on the social media platform.
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'Clear Insider Trading'
The charges against Van Dyke, which the Department of Justice said would constitute “clear insider trading,” mark the first major legal action taken against an American suspected of such activity on prediction markets. It follows months of mounting suspicions about traders profiting from non-public information on political events, such as Maduro’s capture and the Iran war.
With several reports of largely inactive accounts earning massive profits from suspiciously well-timed bets, insider trading fears have fueled further scrutiny of prediction markets themselves and prompted bipartisan calls for further regulation.
Certain Republican lawmakers have said Van Dyke should receive a pardon, accusing fellow lawmakers of routinely committing the same alleged crimes with no consequences.
Ann Skeet, senior director of leadership ethics at the Markkula Center for Applied Ethics, told Newsweek more insider trading in the prediction markets is likely “due to the broad range of events covered and the relatively light regulatory environment governing them.”
“Kalshi has preemptively blocked politicians and athletes from trading on their own campaigns or events but obviously this not enough to deter bad actors,” she said.
She described this behavior as a “new low in ethical leadership standards.”
“A comprehensive approach to the issues is needed including legislation such as the proposed bills, standards set by various government agencies to prevent those with inside knowledge of political events from inappropriately using that knowledge, and greater sanctions for transgressions,” she said.
Trading on Prediction Markets
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Polymarket, meanwhile, has said the case underscores the efficacy of its newly introduced system for clamping down on "insider trading and market manipulation."
"Last month, we published our enhanced market integrity rules to combat insider trading," the company posted on X on Thursday. "When we identified a user trading on classified government information, we referred the matter to the DOJ & cooperated with their investigation. Insider trading has no place on Polymarket."
Regulators, States and Platforms Move to Tighten Oversight
The case is progressing against Van Dyke, who allegedly pocketed over $400,000 thanks to several event contracts tied to Maduro’s ouster.
“All members of the government, including service members, owe a duty of trust and confidentiality to the government and the American people,” said David I. Miller, Director of Enforcement at the CFTC, which separately charged Van Dyke in a civil complaint filed Thursday.
Miller added that the agency “will continue to be vigilant in policing the illegal use of inside information in the prediction markets and other markets within the CFTC’s jurisdiction.”
And efforts to clamp down on prediction market insiders are gathering momentum across the U.S.
On Wednesday, New York Governor Kathy Hochul signed an executive order “prohibiting state employees from engaging in insider trading on prediction markets.” This follows similar moves by Illinois Governor JB Pritzker and California Governor Gavin Newsom.
"Getting rich by betting on inside information is corruption, plain and simple," Hochul said. "Our actions will ensure that public servants work for the people they represent, not their own personal enrichment."
Maryland Governor Wes Moore, a Democrat, also posted to X about a similar executive order, banning Maryland state government employees from using inside information acquired from their jobs to make a profit on predictions markets.
"Effective immediately, Maryland state government employees are BANNED from using inside information from their jobs to make money on prediction markets. Government officials should never be able to participate in prediction markets. It creates a conflict of interest for officials and encourages them to work for the markets and not their constituents. My executive order makes sure no one in my administration will be able to line their own pockets through predictive markets," Moore posted.
And Polymarket rival Kalshi, which adopted its own set of enhanced 'guardrails' against market manipulation in March, this week announced that it had suspended three political candidates for “trading on their own elections.”
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