DIGITAL LIFE

"Profiting from the misfortune of others"... Website makes millions of dollars from bets on the conflict in Iran.

While American and Israeli missiles were destroying military installations in Tehran on the morning of February 28, an online betting platform was paying out those who had predicted the exact day of the attack. Welcome to Polymarket, which bills itself as the world's largest prediction market — and which has just broken its all-time record by betting on war.

Polymarket works like a stock exchange, but instead of company shares, it trades probabilities of future events. Users buy "Yes" or "No" contracts on questions like "Will the US attack Iran by February 28?" or "Will there be a ceasefire in Ukraine by March?". Bets are placed in cryptocurrencies.

Each contract is worth between zero and $1: those who guess correctly receive $1 per share purchased; those who guess incorrectly lose everything. The price of each contract at any given time reflects the implied probability that the market assigns to that event — a contract at $0.38 means that bettors collectively estimate a 38% chance of the event occurring.

The platform profits from fees based on transaction volume. And the volume, especially in war contracts, has been significant.

On the Polymarket geopolitics page, it is possible to identify at least 30 active markets related to tensions in the Middle East. Among the open contracts at this moment:

-Will there be a ceasefire between the US and Iran by March 31? (61% probability)

-Will US ground forces enter Iran by March 7? (28%, with $2 million wagered)

-Will the US invade Iran before 2027? (19%, with $207,000 in volume)

In the section dedicated to Ukraine, the contract "Will there be a Russia-Ukraine ceasefire in 2025?" accumulated $61 million in volume, with only a 3% probability. Other contracts detail the Russian advance city by city, such as the capture of Pokrovsk (57% chance) and Kostyantynivka (90%).

The fear of a Chinese invasion of Taiwan by the end of 2026 is at 13% on the platform, with US$5 million wagered. The chance of the US assuming some territorial control over Greenland is at 39%.

The Iran record... The February 28 attacks transformed Polymarket into something unprecedented. As reported by CoinDesk, the contract "By what date will the US attack Iran?", opened in December, accumulated US$529 million in total volume — becoming the largest ever recorded in the "World" and "Geopolitics" categories of the platform, and the fourth largest in its history. The contract on Khamenei's departure from power moved US$45 million and was settled after the confirmation of his death, with the main bettor winning US$757,000.

The speed was as remarkable as the volume. Polymarket took less than 24 hours to transform a war in the Middle East into an active trading session.

The fear of a Chinese invasion of Taiwan by the end of 2026 is at 13% on the platform, with US$5 million wagered. 

Six accounts, exact date, $1.2 million...The most disturbing activity occurred before the first missiles. The data analysis company Bubblemaps identified, according to CoinDesk, six accounts that profited approximately $1.2 million by betting that the US would attack Iran specifically on February 28th. Most of the wallets were created in the 24 hours prior to the attack, bet on that specific date, and not on broader windows, and bought shares a few hours before the explosions.

The episode was not isolated: in February, Israeli authorities indicted a military reservist and a civilian for using confidential data to profit approximately $150,000 from security operations on Polymarket. In January, a new account had bet $30,000 on the capture of Nicolás Maduro hours before an American operation and pocketed $400,000.

The platform's argument — and the criticisms...Polymarket defends its markets as an information tool. The platform added a note to its Middle Eastern markets stating that, after speaking with people affected by the attacks, it concluded that prediction markets "could provide answers that television news and X couldn't."

Critics respond that this argument does not eliminate the central ethical problem: the platform creates direct financial incentives linked to the occurrence of military attacks and deaths. Even among prediction market platforms that have tested legal and regulatory limits, most have set a limit on direct betting on wars. This is not the case with Polymarket.

The platform is currently restricted in more than 30 countries. Ukraine banned access after the gaming regulator cited the lack of a license and the nature of the markets, which include bets related to the conflict itself in the country.

In the United States, Polymarket was fined $1.4 million by the CFTC in 2022 for operating without registration. Subsequent investigations by the FBI and the Department of Justice were closed without charges in 2025. The platform received investment from the parent company of the New York Stock Exchange and currently operates from its headquarters abroad, which makes oversight structurally difficult.

In the US Congress, Representative Ritchie Torres introduced a bill to prohibit federal employees from negotiating contracts linked to government decisions when they possess non-public information. The proposal has not yet been voted on, and new markets related to the conflict in Iran continue to open up while the war rages on.

mundophone