Podcast Summary: What A Day

Episode: Prediction Markets: All Bets Are War
Host: Jane Coaston
Guest: Sahil Desai, Senior Editor at The Atlantic
Date: April 10, 2026

Episode Theme Overview

This episode dives into the fast-growing world of prediction markets—specifically, how individuals are making large amounts of money by betting on real-world events such as the recent war in Iran. Host Jane Coaston discusses the overlap between insider trading, national security, and gambling, focusing on platforms like Polymarket and Kalshi. The episode also raises questions about regulatory challenges and the future of prediction markets as they intersect with politics and global conflict.

Key Discussion Points & Insights

1. The Rise of War-Based Prediction Markets

• News Hook (00:12): The White House has forbidden staffers from betting on the war in Iran in prediction markets following evidence of suspicious, well-timed, and highly profitable bets—hundreds of thousands of dollars made by anonymous accounts.
• Key platforms: Polymarket (crypto-based, often unregulated) and Kalshi (regulated, follows KYC rules).
• Notably, Israeli officials arrested several reservists for using classified information to bet on airstrikes (01:52).

2. Who Are the Bettors? How Do These Bets Work?

• Anonymity and Suspicion:
  • Sahil Desai: "We know nothing... all bets happen through crypto, which means there's a lot of anonymity." (02:54)
  • Suspiciously successful timing and the creation of accounts just days before events suggest possible insider trading.
• Real-world example: A single trader made nearly $1 million since 2024 by predicting events in the Iran conflict.

3. Prediction Markets: Gambling or Something Else?

• Sahil on the debate:
  • "These sites say they are not gambling... but I think this is essentially gambling. If you even look at the advertising that these prediction markets run... they often talk about this as gambling." (03:53)
  • The markets theoretically differ from gambling because users bet on the outcome of future events instead of against a 'house.'
  • Memorable quote: "For all intents and purposes, it’s the same as betting." (04:18)

4. Evidence of Insider Trading

• There’s a consistent pattern of large, successful bets being placed immediately before major, confidential events.
• Sahil: "There were lots of shady bets in the hours before the Ayatollah was assassinated... huge spike in the size of bets and the number of bettors." (04:49)
• Tracking bettors is extremely difficult due to crypto and VPN use.

5. Risks & Ethical Issues

• The stakes go beyond money: If people with inside information are betting, they may also influence or signal upcoming critical events (military strikes, ceasefires).
• Sahil warns: "There’s a distinction between betting on YouTube videos and betting on war... insider trading happening here could materially be a problem for military campaigns going forward." (07:19)
• Military and intelligence agencies could use prediction market activity to anticipate actions (07:55).

6. Regulation and Enforcement Challenges

• Polymarket vs Kalshi:
  • Kalshi is regulated and follows financial "Know Your Customer" rules.
  • Polymarket is largely unregulated, especially in the US, and easier to use anonymously.
• Trump administration is permissive: "Trump Jr. is an advisor to both companies... the Biden administration was regulating Polymarket quite stringently. And then Trump came into office, and it's a different story." (08:52)
• Bleak outlook: There's little optimism that regulation will catch up before prediction-based insider trading becomes endemic.

7. Looking Ahead: The 2026 Midterms & Prediction Markets

• The coming midterm elections may be the "first prediction market election," according to Sahil (10:03), opening 1,000 strange and potentially dangerous scenarios, including candidates betting on their own races.

Notable Quotes & Memorable Moments

• "We know nothing. So, on Polymarket, basically all bets happen through crypto, which essentially means that there's a lot of anonymity under these bets."
  —Sahil Desai [02:54]
• "For all intents and purposes, like, it's the same as betting."
  —Sahil Desai [04:18]
• "There are lots of tools that can now spot potential insider trading basically in real time... it's not hard for any military in the world to get access to these..."
  —Sahil Desai [07:55]
• "The 2026 midterms are poised to be the first prediction market election—and that’s about to pose about 1,000 different strange scenarios that no one is ready to deal with."
  —Sahil Desai [10:03]

Timestamps for Key Segments

• 00:12 — Introduction to the prediction markets and current betting news
• 01:15 — News recap of recent highly profitable war-related bets
• 02:27 — Jane’s interview with Sahil Desai begins
• 02:54 — How little we know about the actual bettors
• 03:53 — Are prediction markets gambling or not?
• 04:49 — Early evidence of suspicious bets just before major events
• 06:13 — The difficulty of tracking down suspicious bettors
• 07:19 — Risks beyond insider trading: National security concerns
• 08:43 — Enforcement, regulation, and the Trump admin’s regulatory stance
• 10:03 — How prediction markets may impact the 2026 US midterms
• 10:53 — End of interview, Jane’s commentary

Tone and Language

• The discussion is brisk, skeptical, and sometimes wry—with an undercurrent of alarm about the implications of unregulated markets where profits are tied to wars and political chaos.
• Jane Coaston's style is direct, occasionally humorous, and deeply questioning:
  • "This sounds like gambling." (08:15)
  • "I am not ready for any of that." (10:46)

Additional News Briefs (Post-Interview, Not Core Theme)

• Reports of US-Vatican tensions and skepticism of the official narrative (14:34–17:20).
• Updates on the failing Gaza ceasefire (17:22–18:36).
• Notable (and comical) stats about how often Democrats swear on Twitter, especially Arizona Senator Ruben Gallego (19:18).

Bottom Line

Prediction markets have exploded into the mainstream, turning war and politics into betting opportunities. Anonymity and lack of regulation foster an environment ripe for abuse, particularly by individuals with insider information about sensitive events. Despite public pronouncements and minor arrests abroad, US regulation lags, and the future could see even more dramatic entanglements with national security and electoral integrity.

Key takeaway:
Sahil Desai: “2026, the midterms, are poised to be the first prediction market election—and that’s about to pose about 1,000 different strange scenarios that no one is ready to deal with.” (10:03)

Recommended action:
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