TEL AVIV (AP) — Two Israelis have been charged with using classified military information to place bets on how future events will unfold, Israeli authorities said Thursday, accusing the individuals of “serious security offenses.”
A joint statement by the Israeli Ministry of Defense, domestic security service Shin Bet and police said that a civilian and a reservist are suspected of placing bets on the U.S.-based prediction market Polymarket on future military operations based on information that the reservist had access to.
Israel’s Attorney General’s Office decided to prosecute the two individuals following a joint investigation by police, military intelligence and other security agencies that resulted in several arrests. The two face charges including bribery and obstruction of justice.
Authorities offered no details on the identity of the two individuals or the reservist’s rank or position in the Israeli military but warned that such actions posed a “real security risk” for the military and the Israeli state.
Israel’s public broadcaster Kan had reported earlier that the bets were placed in June ahead of Israel’s war with Iran and that the winnings were roughly $150,000.
Israel’s military and security services “view the acts attributed to the defendants very seriously and will act resolutely to thwart and bring to justice any person involved in the activity of using classified information illegally,” the statement said.
The accused will remain in custody until the end of legal proceedings against them, the Prosecutor’s Office said.
Prediction markets are comprised of typically yes-or-no questions called event contracts, with the prices connected to what traders are willing to pay, which theoretically indicates the perceived probability of an event occurring.
Their use has skyrocketed in recent years, but despite some eye-catching windfalls, traders still lose money everyday. In the U.S., the trades are categorized differently than traditional forms of gambling, raising questions about transparency and risk.
