A Prediction Market Participant Earned $436,000 on Wagers on Venezuela's Political Shift.
A bettor made nearly half a million dollars on the ouster of Nicolás Maduro just before it was made public, raising questions about the possibility of profiting from confidential information of the US operation.
Changing Odds in Wagers
Predictions made on the forecasting site, an online prediction market, that the leader would be out of power by the close of the month surged in the time leading up to former President Trump stated on Saturday that the Venezuelan leader had been apprehended.
One account, which joined the platform in December and took four positions, all on political events in Venezuela, made more than $436,000 from a modest bet of over $32,000.
The identity is unknown. The anonymous account had only a string of letters and numbers for identification.
Market Signals Before Public Statement
Platform data shows that users put the odds of Maduro's exit at just under 7% in the midday period of Friday, January 2nd.
However the market's assessment had jumped to eleven percent by late Friday night and skyrocketed in the first hours of Saturday, pointing to a sudden change in positions immediately prior to the social media post was made.
"This specific wager has all the signs of a trade based on non-public details," said an industry expert.
Several of other traders also earned tens of thousands of dollars from similar wagers.
Legal Questions Grows
Politicians are starting to take note.
A bill put forward on the start of the week would prevent federal workers from making trades on forecasting platforms if they have "insider details" related to a bet.
The Prediction Market Landscape
Forecasting platforms have become increasingly popular in the United States, with participants able to wager on everything from elections to political events.
Prediction markets faced scrutiny under the last presidential term. But it has found a more favorable environment during the current presidency.
Using confidential knowledge is against the law in the traditional financial markets, but there are fewer regulations in the forecasting industry.
A company executive for a competing service said their site "has clear rules against insider trading of any form."
