How a mystery gambler scored big on Maduro’s ouster

0:02Since the U.S. capture of Venezuelan president Nicolas Maduro, it remains pretty hazy who the winners and losers of this whole situation are going to be. But there was at least one person who definitely came out on top. An anonymous gambler. Just hours before the raid, this person, or maybe people, placed a hefty online bet that Maduro would be out of power by the end of January. So after the news broke that Maduro had been taken, this mystery gambler walked away with hundreds of thousands of dollars. So now everyone wants to know, who placed this bet? And did they know something that the rest of us didn't?

0:53From the newsroom of The Washington Post, this is Post Reports. I'm Martine Powers. It's Wednesday, January 7th. I cannot stop thinking about this strange side story to the news out of Venezuela. Is this evidence of some kind of national security leak? But also, how is it possible or even legal that someone could bet on the capture of a world leader? So today, I'm talking with banking reporter Andrew Ackerman about the growing world of betting on real life events. And what we know about this gambler's huge payday.

1:35Andrew, thank you so much for being here. Oh, you're welcome. Thanks so much for having me. So I'll be honest that before this news came about, about this one bet on Maduro being in office, I didn't even know that this was something that you could bet on, that there were platforms where people could bet on news events as if they were sports. It's definitely a completely wild side story to this whole episode. I mean, a couple of years ago, you probably wouldn't have been able to bet like this. But these prediction markets have grown dramatically in the last two years, went from being this like niche, very tiny corner of the markets to something.

2:15We're now seeing more than$3 billion a week in bets on some of these platforms. Oh, my gosh. And I want to come back later to a little bit more of like why this has grown, why it's become so popular. But just very briefly, like, how does it actually work? So these are places where you can bet on what? Yeah, so there are websites where people can place bets online on pretty much anything.

2:44The outcome of sports games, geopolitical events like elections, what happens to characters in random TV shows. There are basically two dominant markets here. Calci, which is overseen in the U.S., it's regulated here, and it's not quite the free-for-all of the second market, Polymarket. That's where this Maduro trade happened, and it's offshore, meaning it's not designed to be used by Americans because it's not regulated here. Polymarket is kind of seen as the Wild West here. So you can open up what's called a wallet, and you can place a bet, and it can be about anything you want. You may not get anyone else to engage in the bet.

3:25You may not have any liquidity, they say, but it's pretty wide open. And clearly the ongoing situation in Venezuela was something that people were interested in betting on. How did this particular bet on the fate of Venezuelan president Nicolas Maduro unfold? So people are using cryptocurrencies to make these bets. That means that it's on the blockchain. It's just the technology that underlines these payments. And it's a private form of money. Arguably, the benefit of the blockchain is there's a public ledger. So you can go online and you can see these bets. You can see this wallet that this guy opened up late last month.

4:10He starts making very small bets initially, like a$96 bet on December 27th. Cumulatively, there's something like$35 ,000 of bets over a few days. You go from small bets to increasingly larger bets. They're all some variation of will Maduro be ousted or will there be an invasion or will the U.S. be in Venezuela and oust him by the end of the month. And it seemed like in the days leading up to this, most people were like, no, Maduro will not be ousted by the end of January. Most people were betting on the side of things of like the status quo is going to be in place by the end of this month. Yeah.

4:50I mean, he's basically at this point betting about eight cents on the dollar that Maduro will be gone by the end of the month, which basically means this particular market is assessing or projecting a seven or eight percent chance that this guy is going to be ousted. Okay. It's pretty low. So he makes these small bets and they get bigger. And then it kind of culminates a few hours before the attack at about 10 o 'clock on Friday night. He bakes a little over a$7 ,000 bet that he'll be ousted. The way these contracts, the way they work, it's sort of a yes or no. You either win the bet or you don't.

5:25And when you say contracts, contracts here basically means a bet. Yeah. The bet that you place with the website. That's right. And he, of course, wins on all these bets. And so he gets it totals out to be 400 something thousand dollars. And so, you know, somebody who is making multiple bets, there's not a lot of information to indicate that there's an attack coming. I mean, we know that the Trump administration has been kind of tightening the noose around Venezuela rhetorically. Yeah. I mean, then they've been attacking these boats in the Caribbean. But nothing to suggest that this was going to reach this climax, like right on this morning of January 3rd.

6:05Correct. Nothing public. And so it's very suspicious. So do we have any idea who this person is who made so much money off this bet? No, we don't. I mean, we can trace the money a little bit. That's on this blockchain where all the bets occur. There could be an investigation. Maybe the Justice Department would be interested. Yeah, like is this person connected to the military? Was he privy to some kind of leak of national security information that would have given him a kind of tip off that this was coming? I mean, those are. Those are all great questions. And that's what people expect. That's what people anticipate.

6:39But, you know, it could be somebody who told somebody overseas who made the bet and they aren't Americans. I mean, I don't know if that would be insider trading that would be unlawful in that particular jurisdiction. It might be hard for the U.S. to actually go after that person. The people that I have talked to the last couple of days have said it should be treated as a leak of government secrets, as a security leak. They think that the Defense Department and the Justice Department should investigate. Yeah, because it seems like particularly the military would have an interest in wanting to know how someone might have come by this information and whether there is a leak, that they would want to investigate this.

7:18You would think so. I mean, like there's I can think of scenarios where it's sort of obvious, I guess, but you don't want people to get wind of a major attack that puts people's lives in jeopardy. I mean, what if Maduro had gone on a poly market, you know, Friday night and seeing, oh, the bets are going. Something might be up. Yeah. You know, what if he got suspicious and fled earlier? You know, there's a lot of what ifs. But I think the question is sort of in insider trading cases, you typically have people who have a duty of care. So they owe a duty of confidentiality to somebody, whether that's shareholders of the company.

7:54We don't know what the motivation here was, but it certainly looks bad. Yeah, yeah. And it sounds like if there's not an investigation by the U.S. government that maybe we won't find out because these apps are created to protect people's privacy because they're dependent on crypto and blockchain and that there are mechanisms in place that keep the users of these apps, the winners of these bets, private. Yeah, I mean, I have no idea how to handicap the likelihood that we eventually find this person. But you could probably bet on it. You could probably bet on it. Maybe you could, yes. After the break, we look closer at the murky world of betting on real life events and why these prediction markets could be really dangerous.

8:39We'll be right back.

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9:32So let's talk a little bit more about these apps, because as I said, I really wasn't. I mean, I think I'd heard here and there like, oh, you know, people are betting online about how this TV show will end. But I didn't realize that this was so widespread. So I thought maybe we could even just open up one of these apps to see like what people are betting on. So you said the name of one is Poly... Polymarket. Yeah, that's where this happened. So let's go on Polymarket. if my wife... You won't actually be able to bet on these without a VPN to like... Because you can't bet on Polymarket in the US.

10:11Okay. Okay, so the bets that people are doing right now, Khomeini out as supreme leader of Iran by June 30th. So people are betting on Iranian politics. There's, okay, Cavaliers versus Pacers, Lakers versus Pelicans. These seem like normal sports bets to me. The presidential election winner of 2028, People are betting whether J.D. Vance or Gavin Newsom will win the presidency in 2028. And neither of them have even announced that they're running for president. Yeah, I don't know. I think it'll be a while before you get a payoff for that. Oh, how much money the movie Avatar Fire and Ash is going to make, which like is, I don't know.

10:51I feel like this is a fascinating insight into all the weird, bizarre things that people are interested in betting on. Why do you think this is so popular? I think there is a moment in the culture where betting has just kind of taken off. I mean, the sports, I watch NFL games. There's all kinds of advertisements in the stadiums, commercials encouraging people to bet. There used to be legal impediments to doing this. The regulators would not let betting markets take off. You couldn't bet at all on the elections. Yeah, because I'm surprised to see all these election-related bets that are being posted here because I thought that it was illegal to bet on the outcome of elections in the U.S., specifically so that people don't have a financial motivation, like a direct financial motivation to vote for one candidate or another.

11:43So the Biden administration maintained there was basically no public benefit from allowing people to bet on elections. But that's shifted dramatically in the last couple of years. A federal judge ruled in 2024 that basically the posture of the Biden administration was incorrect. And so then you could bet. And then what happened in 2024 was arguably one of the most accurate metrics we got for who was going to win the presidential election in 2024 came from these websites. They accurately predicted Trump's win. I believe they accurately predicted other metrics like who is going to win in the swing states in a way that was a little bit better than the polling.

12:26And so then you got the switch in administrations and the Trump administration is very pro crypto, which, like I said, a lot of the betting happens using cryptocurrencies. I mean, the Trump organization has also announced they're going to have their own betting market. It's called Truth Predict. I think it's in beta testing. But, you know, it doesn't sound like this is a situation where the Trump administration has any real incentive to try to, like, crack down on these websites or get tougher in regulating some of the potential problems that could come up with these websites. Yeah, I mean, I think they like it.

13:02These platforms have ties to senior members of this administration, including the president's son, Donald Jr., who's an advisor to Calci and Polymarket. The real question is, are these gambling platforms like sportsbooks you might see in a casino? Or are they like stocks, you know, financial instruments that you can trade and are regulated generally at the federal level? The only sort of legal impediment right now is the state level gambling commissions. And they sort of say, like, this is gambling. I believe Massachusetts has sued. There's what's called cease and desist orders in I think eight other states.

13:41And then in response to those, some of these platforms are suing. They're sort of saying, well, we have this right. This is a federal thing. This isn't subject to state regulation. And that's just going to play out in the courts. But there's not going to be any effort, I think, from the federal government or from the Congress-related crackdown here.

14:02so i mean you mentioned like there arguably is some value to these kinds of betting apps and marketplaces where you know you can see how people are feeling about something or that it has its finger on the pulse of public sentiment but what are the potential downsides or risks of the proliferation of this of empowering people to bet on anything yeah so i mean i think the two obvious ones are it creates incentives for people with insider knowledge to trade and then the people on the other side have no idea that they're betting against somebody who knows something specific is coming. Some of the platforms say we have, you know, we don't allow that to happen, but these aren't stock markets.

14:44In the U.S. stock market, you have very thought out procedures at all these companies, like the CFO of a large company knows what he can and cannot say about the financial performance of the company that they work at. They can't just go and tell friends, you know, we're going to kill it in earnings tomorrow. Because the stock market is so much more highly regulated and that there are real, you know, people know that there are criminal ramifications to like saying the wrong thing or like we're kind of encouraging some kind of... Basically, in the stock market, you have to have fair disclosure when it comes to securities that are traded on stock exchanges and elsewhere in this country.

15:22And you just don't have those rules in this space. These are basically futures contracts, which means they're overseen by this agency called the CFTC, the Commodity Futures Trading Commission. It's a very small agency. This is such a fast-growing market. They haven't had time to really write rules for it. They don't really have the bandwidth to oversee it. We're really just a year out from an administration that was running the CFTC that really resisted or was very conservative about these markets. Mm-hmm. So you said that there were two ways in which there are some real pitfalls here. One is the idea that people with insider knowledge could be placing bets that they stand to make money off of because they know so much more about the thing that you're betting on.

16:06And then if you regular Joe Schmoe place this bet, you don't realize that you're never going to win. Yeah, they're not necessarily fair. They're not playing fields like the stock market is supposed to be. And then what was the other way? Well, the other thing is, you know, call it whatever you want, prediction market, gambling markets. If you're investing in the stock market, you're putting money into stocks that over time are likely to increase in value. With this, that's not necessarily the case. These are binary markets. You either win or you lose. You don't get interest. Your price doesn't go up or down, really.

16:37It's yes or no. And those aren't really traditionally thought of as investments. You want people investing in like the economy and in companies that have underlying financials. This isn't quite that. And so there's that red flag where they could be dumping all kinds of money. And the counter to that is, well, it's kind of like buyer beware, right? Like people should be able to do with their money as they wish. If they want to make a bunch of money off of the gross of whether Avatar, Fire and Ash made more or less than this amount of money, then like that's their prerogative. But gambling is very addictive.

17:11And it's this isn't. So I talked to a regulator earlier in the week who had, I thought, sort of a third insightful point. And that was the risk that this creates perverse incentives, that there was some speculation earlier last year before Charlie Kirk's murder that he might run for office. You could bet. Would Charlie Kirk run for office? And so does allowing that kind of thing, does that create perverse incentives for people on the other side of the bet to commit murder? That was this person's concerns. And thinking about the potential implications of this as this market gets bigger and bigger and people figure out all kinds of bizarre things to bet on.

17:51To manipulate the market. Yeah. And it could have potentially perverse or certainly negative like real world consequences. Dangerous. Yeah, dangerous. Yeah. So that's sort of hypothetical. Like, I don't want to suggest that like Charlie Kirk was murdered because someone was trying to profit from these markets at all. But I'm just reporting what a critic raised. Yeah, that these are questions that people who think about these markets are asking. Yeah. So where is this all leading? Like, what are your what are your questions about how this continues to shape out? I mean, look, I'm kind of a regulatory nerd.

18:25I've spent a lot of my journalistic career writing about how Washington regulates Wall Street. And it is really interesting to me what will happen here. Ultimately, will these markets be treated like gambling or will they be treated like financial instruments, which is a totally different type of oversight? It looks like they're just going to get bigger and bigger. I mean, the administration's full on in on this. I mean, there's certainly people who I've talked to who say it's going to be kind of a fine line balancing these issues. If you're worried about insider trading, but you like the transparency that these markets provide, you have to have some kind of regulatory perimeter around this that balances both of those objectives.

19:03And we're not there yet. This administration isn't. They have a very deregulatory posture right now. They've kind of shut down the CFPB, effectively the Consumer Financial Protection Bureau. In the absence of new regulation, it's very clear that these markets are here for a long time. They're going to grow dramatically, and they're not going anywhere.

19:31Andrew, thank you so much. Thank you so much for having me.

19:37Andrew Ackerman covers banking for The Post. That's it for Post Reports. Thanks for listening. Today's show was produced by Emma Talcoff and edited by Ariel Plotnick and Dennis Funk. It was mixed by Sean Carter. Thanks to Mike Madden. Good journalism is even better when it's shared. With a premium subscription to The Washington Post, you get three extra accounts to share with friends and family, so they can stay informed, too. Right now, you can get a premium subscription to The Post for just$6 every four weeks. Again, just$6 unlocks trusted reporting to share with other people in your life. And after your first six months, it'll cost$19 every four weeks.

20:20You can cancel anytime. Head over to WashingtonPost.com slash subscribe and get premium access to The Washington Post today. Again, that's WashingtonPost.com slash subscribe. I'm Martine Powers. We'll be back tomorrow with more stories from The Washington Post.

21:10We'll see you next week.