A Prediction Market User Made $436K from Wagers Predicting Venezuela's Political Shift.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader just before it was publicly declared, leading to inquiries about potential gains made from inside knowledge of the event.
Market Movement in Forecasts
Predictions made on the forecasting site, an online prediction market, that the leader would be removed from office by the close of the month increased in the period preceding President Donald Trump announced on Saturday that the Venezuelan leader had been apprehended.
A particular user, which joined the platform last month and took four positions, all on political events in Venezuela, profited a total of $436K from a starting bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Odds Fluctuate Before News Break
Trading information shows that participants put the odds of the president's removal at just under 7% in the midday period of the Friday before the event.
Yet the odds had jumped to eleven percent by the end of the day and surged in the early hours of the next day, suggesting a sudden change in betting activity immediately prior to the public announcement was made.
"That trade has all the hallmarks of a trade based on inside information," stated Dennis Kelleher.
A handful of other platform users also made large payouts from similar wagers.
Political Attention Emerges
Elected officials are growing concerned.
Proposed legislation presented on the start of the week seeks to ban government employees from participating on forecasting platforms if they have "insider details" related to a market.
Industry Context
Forecasting platforms have grown significantly in the past few years, with users able to predict everything from elections to political events.
The industry faced scrutiny under the previous administration. But it has experienced less resistance during the present political climate.
Insider trading is a crime in the traditional financial markets, but there are less oversight in the event betting space.
A spokesperson for another major platform said their site "has clear rules against such activities of any form."
