- Conflict-linked betting on Polymarket reached record volumes, with geopolitical wagers jumping from US$163.9 million to US$425.4 million in the week ending March 1.
- Nine of the ten most-traded geopolitical markets focused on Iran, including a controversial US$104 million market on the Supreme Leader’s status following his death over the weekend.
- The surge triggered calls for a regulatory crackdown, as US lawmakers urged the CFTC to act against offshore platforms hosting markets tied to war, terrorism, or assassination.
Conflict-linked betting surged on prediction markets last week as traders piled into contracts tied to US-Israeli strikes on Iran, pushing Polymarket volumes to records and drawing calls for a crackdown.
User-compiled Dune Analytics data showed Polymarket users placed US$425.4 million (AU$650 million) on geopolitics in the week ending March 1, up from US$163.9 million (AU$250 million) a week earlier.
Total wagering across the site hit US$2.4 billion (AU$3.6 billion), up from US$1.8 billion (AU$2.7 billion). Geopolitics rose to about 18% of all bets, from roughly 9% the prior week.
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Iran Markets Take Over
Nine of Polymarket’s 10 most-traded geopolitics markets last week were tied to Iran, according to blockchain data. Contracts on the timing of US strikes drew between US$53 million (AU$81 million) and US$8 million (AU$12 million) in weekly volume.
The most active geopolitics market asked whether Ayatollah Ali Khamenei would be out as Iran’s supreme leader by Feb. 28.
But Khamenei was killed over the weekend.
It drew US$84 million (AU$128 million) in volume during the week, out of US$104 million (AU$157 million) total.
After bombs hit Iran on Saturday, blockchain researchers flagged several accounts whose trading they said looked consistent with suspected insider knowledge of the attacks.
Kalshi, a CFTC-regulated platform, listed a market on when Khamenei would cease serving as supreme leader, but said it would not resolve if he died, instead settling at the last price before death.
That was quite controversial and drew a lot of backlash. Keep in mind US rules enforced by the CFTC bar contracts tied to assassination, terrorism or war. Though Kalshi lists fewer Iran-related markets under CFTC rules, and none of its top 10 markets by weekly volume on Monday tracked geopolitics.
But Polymarket’s main operators are offshore and outside direct CFTC oversight. Democratic lawmakers wrote to Chair Michael Selig urging action against war- and assassination-linked markets, seeking a response by March 9.
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