Still, trading on war is hardly a novel phenomenon.
“Intrade did trade huge volumes,” says Prof Leighton Vaughan Williams, a gambling expert at Nottingham Trent University, including on Saddam Hussein’s fate. “In the hours leading up to the announcement of his capture, the Intrade market that he would be ‘captured or neutralised’ that month suddenly shot up dramatically.”
War has long been a “significant and direct catalysts for speculation and price movement”, on financial markets, says Chris Grove, a gambling analyst with Eilers & Krejcik. “Ask an oil trader if trading on war is new.”
For commodity traders, betting that the price of a barrel of oil will increase is often synonymous with unrest in the Middle East.
Likewise, the price of a certain metal may be affected by a local military coup which halts production in a crucial market.
Yet a wide range of things can influence oil and metal prices. The difference with prediction markets is they allow any anonymous individuals to take yes-no positions on very specific questions.
The popularity of these markets has also surged with millions of ordinary punters and crypto enthusiasts. Some 32 million people visited Polymarket in January alone, according to Semrush data.
Some betting experts warn that the overlap of military decision-making and betting risks influencing how global conflicts play out. Ricky Gold, who runs Juice Reel, a bet tracker marketplace, warns: “A political decisionmaker may choose to ‘yes’ a military decision for financial gain, and in theory start/stop wars as a business decision.”
Kalshi has recently cracked down on insider trading on its app.
In February, the exchange sanctioned an editor for the YouTube streamer MrBeast and a former California governor candidate for alleged insider trading. Kalshi said its system had flagged a series of almost perfect and “statistically anomalous” wins.
Kalshi has also refused to pay out on a $54m market on the death of Ayatollah Khamenei. Kalshi said it would repay punters at the last price before his killing in a US strike.
‘Pretty gruesome’
Tarek Mansour, Kalshi’s chief executive, said this was because the app, which is regulated in the US, bans bets that are “directly tied to death”.
He said: “Traditional markets, like oil futures, can be proxy markets for war and death. But we believe that’s different than having a market directly settling on someone’s death, which is not allowed for US regulated entities.”
Betting on air strikes like you would bet on the outcome of a sports match also inevitably throws up moral questions for gamblers.
“It seems pretty gruesome for anyone to bet on another human being dying, or being killed, and profiting from that,” says one top Kalshi trader.
The trader adds, however, that prediction markets could act as a “back channel for private information” to reach the public in times of conflict. It is possible that the wisdom of the crowd could end up offering just another lens to help forecast events in a war.
