An Prediction Market User Earned $436K on Wagers Predicting the Ouster of Maduro.
An individual made nearly half a million dollars by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, sparking debate about whether someone profited from confidential information of American actions.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be no longer in control by the month's conclusion rose in the time leading up to former President Trump stated on January 3rd that the president had been taken into custody.
One account, which became a member last month and made four bets, all on the Venezuelan situation, earned over $436K from a modest bet of $32,537.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Probability Spikes Before News Break
Platform data shows that traders assessed the probability of a political change at just 6.5% in the late afternoon of the Friday before the event.
But the odds had jumped to eleven percent by the end of the day and spiked dramatically in the morning of the next day, suggesting a sudden change in positions right before the public announcement was made.
"That trade has all the characteristics of a bet based on inside information," commented a financial reform advocate.
A handful of other individuals also earned significant sums from predicting the capture.
Regulatory Scrutiny Intensifies
Elected officials are starting to take note.
A new rule introduced on Monday would prevent public officials from making trades on forecasting platforms if they have "insider details" related to a bet.
Industry Context
Event-driven betting sites have surged in popularity in the past few years, with traders able to predict everything from sports to political events.
Prediction markets faced scrutiny under the previous administration. But it has found a more favorable environment during the present political climate.
Insider trading is a crime in the securities markets, but there are less oversight in the forecasting arena.
A spokesperson for a competing service said their site "has clear rules against trading on insider information of any form."