An Israeli civilian and an IDF reservist were indicted on Monday in the Tel Aviv District Court on charges of exploiting classified military information to place wagers on the prediction-market platform Polymarket.
The case concerns acute operational-security risks during wartime, according to the authorities, the court reported Thursday.
The court partially lifted a sweeping gag order that had been imposed on the affair. It only authorized publication of a prosecution-approved outline of the core allegations and the investigative bodies involved.
The suspects were arrested in a joint operation involving the Shin Bet (Israel Security Agency), a Defense Ministry’s investigative unit, and the Israel Police. The investigators suspected that reservists had been betting on the timing of military operations based on classified information they had access to during their service.
The prosecutors said they had discovered evidence that incriminated the civilian and the reservist and would prosecute them for “serious security offenses,” bribery, and obstruction of justice.
They asked the court to extend the suspects’ detention until the end of the proceedings.
Further details about the case remain under legal restrictions, including the identity of the defendants and specifics about their wagers and sources of information.
Indictment does not involve senior defense officials
Despite online speculation in recent weeks about a broader “security affair,” the indictment does not involve senior defense officials, media outlets reported. The indictment did not include allegations framed as “intent to harm state security,” pushing back on claims that had circulated publicly while the gag order was in place, Ynet reported.
The affair follows weeks of reporting about Polymarket activity tied to Israeli military developments. Last month, the Shin Bet examined suspicions that someone inside the defense establishment had used classified information to place bets on Polymarket, KAN news reported.
The case has put a spotlight on the vulnerability of prediction markets – platforms that allow users to buy and sell “shares” tied to future events – to insider information and potential exploitation by hostile actors tracking patterns in real time.
Polymarket has become a global hub for event-based forecasting in recent years. Unusual, high-confidence wagers can draw attention precisely because they appear to anticipate real-world events with uncanny accuracy, according to reports.