A Prediction Market User Made $436K from Wagers Predicting Venezuela's Political Shift.
A trader profited close to $500,000 by predicting the removal of Venezuela's president shortly prior to it was made public, sparking debate about potential gains made from non-public details of the US operation.
Changing Odds in Forecasts
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be out of power by the close of the month increased in the time leading up to President Donald Trump stated on the weekend that Maduro had been taken into custody.
A single trader, which became a member recently and made four bets, all on the Venezuelan situation, made more than $436K from a modest bet of over $32,000.
The identity is unknown. This unidentified trader had only a cryptographic address for identification.
Probability Spikes Before Public Statement
Platform data shows that participants estimated the likelihood of the president's removal at just 6.5% in the afternoon of Friday, January 2nd.
But the odds had climbed to over 10% by late Friday night and spiked dramatically in the early hours of the next day, suggesting a rapid movement in positions immediately prior to the official statement was made.
"This specific wager has all the hallmarks of a bet based on inside information," commented Dennis Kelleher.
Several of other platform users also earned large payouts from predicting the capture.
Legal Questions Intensifies
Politicians are starting to take note.
Proposed legislation put forward on Monday would prevent public officials from placing bets on prediction markets if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in the past few years, with traders able to predict everything from sports outcomes to political events.
Prediction markets faced scrutiny under the previous administration. But it has experienced less resistance during the Trump presidency.
Insider trading is illegal in the stock market, but there are more ambiguous rules in the forecasting arena.
A spokesperson for a competing service said their site "strictly forbids such activities of any form."
