Norway Confronts the Rise of Prediction Markets as Insider Trading Fears Spread Beyond Wall Street

Only a small circle knew an operation against Venezuelan President Nicolás Maduro was imminent. One of them allegedly used that knowledge to place a bet.

Read more USA vs. Belgium final score, result: De Ketelaere brace sinks USMNT’s World Cup hopes

American special forces soldier Gannon Ken Van Dyke is now facing insider trading charges after prosecutors accused him of profiting from advance knowledge of a planned effort to remove Maduro from power. Before details of the operation became public, Van Dyke purchased positions on Polymarket, an online prediction platform where users trade contracts tied to future events.

When the market eventually resolved, authorities say he had made roughly NOK 4 million.

The case has become a striking illustration of a problem regulators are only beginning to grapple with. Prediction markets increasingly resemble financial exchanges, yet in many jurisdictions they exist outside traditional securities rules. Users are not betting on football scores or horse races. They are speculating on elections, interest-rate decisions, armed conflicts, peace agreements and corporate developments.

And despite Norway’s gambling monopoly, access is simple.

A smartphone, cryptocurrency and a VPN connection are often enough.

Betting on Politics, Wars and Central Banks

Robert Næss, chief investment officer at Nordea, says Norwegians are already using these platforms. He has done so himself, placing wagers on Norwegian football matches through Polymarket.

Kjersti Aksnes Gjesdahl, who leads financial services at PwC in Norway, believes awareness of these markets remains surprisingly low given how accessible they have become.

Prediction markets function differently from conventional betting companies. There is no bookmaker determining odds. Participants buy and sell positions based on the likelihood of an outcome occurring, and prices move continuously as sentiment changes. Positions can be sold at any time, allowing traders to profit from shifts in expectations even if the event itself never materialises.

That dynamic creates opportunities, but also vulnerabilities.

In financial markets, access to privileged information is heavily regulated. In prediction markets, the boundaries are far less clear.

When Information Becomes an Asset

The Maduro case is not the only episode that has attracted scrutiny.

Earlier this year, trading activity surrounding possible negotiations between the United States and Iran drew attention after a cluster of newly created Polymarket accounts reportedly wagered around NOK 1.5 million on a ceasefire. At the time, market pricing implied only a slim chance of talks. Once Donald Trump announced discussions, probabilities surged.

Næss remains unconvinced that such examples automatically amount to insider trading. Political agreements rarely depend on a single decision-maker, making the flow of information difficult to trace.

He also notes that traders do not necessarily need to predict events accurately to earn money. If the market simply begins assigning a higher probability to an outcome, the value of existing positions rises.

Questions about information leaks have even surfaced in Norway.

Last year, an anonymous trader reportedly accumulated significant profits betting on Venezuelan opposition figure María Corina Machado winning the Nobel Peace Prize before the announcement was made public. Næss examined trading patterns and concluded the participant appeared highly experienced, although the Norwegian Nobel Committee rejected suggestions that confidential information had escaped.

For Gjesdahl, the broader concern lies in how easily these markets can intersect with workplaces where sensitive information circulates.

Employees with advance knowledge of acquisitions, failed contracts or strategic decisions could potentially take positions anonymously through online accounts, she says. Unlike traditional investing, there may be no broker, compliance department or reporting system capable of detecting suspicious activity.

Banking and securities markets are tightly supervised. Prediction markets largely are not.

The phenomenon is not confined to politics. A Google employee was charged in the United States in May over allegations that internal company information generated profits exceeding $1.2 million through online wagering.

Norwegian Rules Meet Global Platforms

Norwegian regulators have already decided how they classify platforms such as Polymarket and Kalshi.

Eirik Haugen Tysse, senior adviser at the Norwegian Gambling Authority, says authorities regard them as gambling services under Norwegian law.

Only Norsk Tipping and Rikstoto are permitted to offer gambling domestically. Operators targeting Norwegian consumers without authorisation are considered illegal, even though participation by individual users is not prohibited.

Read more Argentina vs. Egypt live score, result, highlights from 2026 World Cup knockout game

Enforcement has relied mainly on website blocking and restrictions on financial transactions. Between 200 and 300 illegal gambling sites have been blocked, according to the authority.

Officials also acknowledge the limitations.

VPN services can obscure a user’s location, while cryptocurrency transactions complicate efforts to identify payment flows. Together they weaken many of the tools governments have traditionally relied upon.

Norwegian tax rules also place these platforms outside the country’s recognised framework. Unlike winnings from licensed operators within the European Economic Area, gains generated through prediction markets may be subject to taxation.

Concerns Over Consumer Protection

At Norsk Tipping, executives are increasingly worried about the rapid expansion of the sector.

Roger Soleim, director of customer relations, argues that prediction markets occupy a regulatory grey zone. In the United States, many are supervised under financial legislation rather than gambling laws, meaning safeguards aimed at limiting gambling addiction often do not apply.

He believes younger men may prove particularly susceptible.

Norsk Tipping deliberately avoids markets tied to politics, wars or financial developments, viewing them as ethically challenging and potentially vulnerable to manipulation.

Yet the appeal is undeniable.

Prediction markets have expanded at remarkable speed. The New York Times recently reported that combined activity on Polymarket and Kalshi exceeded $130 billion this year after reaching approximately $50 billion during the previous year.

Institutional interest is growing as well. Polymarket counts the parent company of the New York Stock Exchange among its investors.

Tech Companies See Opportunity

The technology sector is also watching closely.

Meta is reportedly developing an internal prediction-market project known as Arena. If launched widely, the initiative could reach billions of users through the company’s existing social media ecosystem.

For Norwegian policymakers, the debate increasingly centres on whether the country’s monopoly model remains enforceable in a borderless digital environment.

Gjesdahl believes reality may already have overtaken regulation. International competitors, she argues, are challenging the state’s practical ability to uphold existing rules.

Political divisions are emerging.

Socialist Left Party representative Mirell Høyer-Berntsen wants prediction markets regulated as gambling, arguing that rebranding speculative products does not eliminate their risks.

The Progress Party takes a different view. Member of Parliament Silje Hjemdal argues that Norway is attempting to defend a domestic monopoly while consumers increasingly participate in global digital markets beyond national control. She favours a licensing regime similar to those operating in Sweden and Denmark and suggests authorities should focus more heavily on payment systems and cryptocurrency exchanges.

A Debate That Is Only Beginning

Næss, meanwhile, sees little justification for prohibition.

He argues that prediction markets often provide better pricing than Norwegian alternatives and believes they can offer an efficient mechanism for aggregating information. Lower transaction costs, he says, benefit users.

The platforms have shown a willingness to remove certain contracts, he argues, and he expects some degree of self-restraint from operators.

Norway’s Parliament is expected to revisit the issue after the summer recess.

By then, prediction markets may be even larger, more mainstream and harder to ignore.

For now, an unusual contradiction persists. Norwegians are free to participate, yet the services themselves remain illegal.

That leaves a curious reality: anyone with cryptocurrency and an internet connection can place a wager on the next election, ceasefire, political crisis or attempted coup, even as the state insists the platforms enabling those bets should not exist.

Read more South Korea Holds Off on Polymarket Decision as Gambling Scrutiny Deepens