A Prediction Market Participant Earned $Nearly Half a Million on Wagers Predicting the Ouster of Maduro.
A bettor profited close to $500,000 on the ouster of Nicolás Maduro shortly prior to it was made public, raising questions about whether someone profited from inside knowledge of the event.
Market Movement 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 rose in the hours before President Donald Trump stated on the weekend that Maduro had been apprehended.
A single trader, which became a member in December and took four positions, all on political events in Venezuela, made more than $436,000 from a modest bet of $32.5K.
The identity is unknown. The anonymous account had only a string of letters and numbers for identification.
Probability Spikes Before Public Statement
Market statistics shows that traders put the odds of Maduro's exit at just 6.5% in the midday period of the Friday before the event.
However the odds had climbed to over 10% by late Friday night and spiked dramatically in the first hours of Saturday, suggesting a sharp shift in positions right before the social media post was made.
"This particular bet has all the signs of a trade based on confidential knowledge," stated a financial reform advocate.
A small number of other platform users also earned significant sums from predicting the capture.
Political Attention Intensifies
Politicians are growing concerned.
A new rule put forward on the start of the week would prevent federal workers from making trades on forecasting platforms if they have "material nonpublic information" related to a market.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the past few years, with traders able to bet on everything from sports to politics.
The industry faced scrutiny under the previous administration. Yet it has found a more favorable environment during the current presidency.
Trading on insider information is against the law in the securities markets, but there are fewer regulations in the forecasting space.
A company executive for a competing service said their site "strictly forbids trading on insider information of any form."
