New York|Gambling Companies Celebrate Indictments as Pressure Grows

Shortly after a member of the U.S. Special Forces was criminally charged this week with using insider knowledge about the capture of Nicolás Maduro of Venezuela to win a series of lucrative bets, the platform on which he gambled, Polymarket, released an approving statement.

“Insider trading has no place on Polymarket,” it said. “Today’s arrest is proof the system works.”

The statement reflects a growing trend among gambling companies, including prediction markets like Polymarket and Kalshi and sports betting platforms like DraftKings and FanDuel. Recent insider trading cases brought in New York have given them an opportunity to argue that illegal behavior won’t be tolerated on their platforms and that the system is working.

DraftKings released a similarly laudatory comment after N.B.A. professionals were charged and accused of similar conduct last fall, saying that the current arrangement allowed law enforcement authorities to “hold accountable anyone engaged in illegal behavior.”

Critics counter that splashy indictments are not a solution to the more widespread problem of insider trading in gambling markets. While prediction markets and sports books are governed by separate regulations, gambling companies across the spectrum have gestured toward indictments to suggest that anything stricter is unnecessary.

“As prediction markets and sports gambling companies like to frame it, they can’t lose,” said Danny Funt, the author of the recent book “Everybody Loses: The Tumultuous Rise of American Sports Gambling.” “When people get caught participating in insider trading, they say the system is working. When time passes without that kind of fraud coming to light, they say this proves concerns about insider trading were overblown.”

DraftKings did not immediately respond to a request for comment. Polymarket pointed to a comment made on Friday by its chief executive, Shayne Coplan, saying that the company would “work proactively with all relevant authorities on any suspicious activity on our marketplace.”