![Secretary of State Antony Blinken speaks during the bilateral peace negotiation closing session with Armenian Foreign Minister Ararat Mirzoyan and Azerbaijan Foreign Minister Jeyhun Bayramov at the George Shultz National Foreign Affairs Training Center in Arlington, Virginia, on May 4, 2023. [State Department photo by Chuck Kennedy/ Public Domain]](https://encyclopediageopolitica.com/wp-content/uploads/2026/10/secretary_blinken_speaks_during_the_bilateral_peace_negotiation_closing_session_-_52891990170.jpg?w=1440)
Prediction markets have taken the world by storm. In this piece, Dr Miranda Melcher, who has spent nearly a decade researching peace treaties and peace processes, examines the impact of prediction markets on efforts to end conflicts. Where generations of scholars, lawyers, and politicians have wondered at the price of peace, now prediction markets like Polymarket and Kalshi allow users to increase the cost of war.
Although some of the negative consequences of mixing prediction markets and insiders in geopolitics have begun to appear already, little examination has explored these concerns into the realm of geopolitical treaty negotiations. This article illuminates how prediction markets could cause attempts at ending conflicts to become even more chaotic and less likely to succeed.
Prediction markets are platforms like Polymarket or Kalshi, where users can bet on binary outcomes for any possible event much like traditional sports betting. Scaled up to the global level and expanded well beyond entertainment, prediction markets enable any potential decision event or outcome to be bet on in a binary fashion. For instance, not just questions like “Will Russia invade Kyiv?” but “Will Russia invade Kostyantynivka [a specific city in Ukraine] before April 10, 2026?” A person making a bet that this will happen will lose out even if Kostyantynivka is invaded, but on April 11. The numbers involved in some of these geopolitical bets are staggering; payoffs can run into the millions. This places a premium on information needed to resolve bets, creating a secondary market closely following the horrors of war “for fun”; a concerning additional repercussion with potential consequence for those on the ground.
This rise in prediction market platforms is despite the fact that there is increased wider awareness and decades of research demonstrating the pervasive negative effects of gambling for both financial and mental health on those who participate. Despite these increasingly known risks, prediction markets not only expand but have yet to face significant regulation, though pressure is growing (including from the NFL) for the US Supreme Court to intervene. Even the same standards that apply to stock market trading or to newly-legal sports betting in the US are not rules that apply to prediction markets. There are therefore huge financial incentives to participate in these unregulated and highly lucrative platforms and perhaps especially if one has insider information. In some ways, the incentives are heightened because of the lack of regulation; no one knows when or if regulation could come, but the idea that this entirely free for all system will continue as it is seems unlikely so if one is going to cash in on the most lucrative opportunities the time may only be now.
The implications for civil wars and those trying to end them
Although the realm of geopolitics and international relations is much broader than just civil wars, these kinds of conflicts remain some of the most violent and long-lasting in the world and impact millions of people even when they are not capturing headlines of major newspapers. This means that although any attempts to interfere with negotiations to try to end these conflicts may not attract as much attention or condemnation as other instances of insider trading, the consequences of such manipulation of negotiations could have immediate and violent consequences on millions of people’s everyday lives in the way that a political scandal in the White House or in 10 Downing Street may not. There are not yet any public incidents where insider trading of this kind has emerged during peace negotiations, however that does not mean it is not already happening or could not happen in the near future. Two similar kinds of incidents have already not only happened and been investigated in the press, but have already led to legal cases that are underway at the time of writing.
The first kind of incident being military operators. Due to the nature of their missions, they may have highly detailed and specific knowledge about when military actions will be taken that have immediate geopolitical consequences such as regarding US actions in Venezuela or US action towards Iran. Although the most obvious figures that would have access to this kind of information are politicians and other leaders, the military operators on the ground, or in the planes, or on the ships or in the hangers or dealing with logistics also have access to information such as a particular mission being flown on a particular day to a particular place which provides exactly the kind of binary information that a prediction market can use to design a bet.
There are already cases underway in the United States regarding pilots who have used exactly this kind of information to make money on prediction markets. They were not stopped in placing these bets because of the lack of regulations as discussed above, and legal cases remain ongoing to determine what legal action could be taken to stop something like this in the future. Translated to the context of a peace negotiation, the equivalent could be making a bet about when a particular senior politician will or will not travel somewhere to begin negotiations or when a particular statement will be released or a photo op made. This is all information that is available not only to the public leader whose actions are already being scrutinised, but also to their staff behind the scenes.
The other type of case that has already happened with prediction markets that could similarly translate to the context of peace negotiations is the instance of George Santos being banned from Kalshi. Specifically, he stands accused of having made public statements to the effect that he would not be attending the State of the Union address. This allowed betting around the binary question of whether he would attend the speech. Due to the lack of regulations, he was able to participate in this betting himself. He allegedly already at this point knew that he would in fact be attending, thus driving the betting more in his favour using information that he was party to, but had specifically ensured the opposite would be disclosed. Although this case is ongoing, to date he is the only person who has been publicly banned from the Kalshi prediction market platform for this incident. In the context of peace negotiations, any public discussion about what different parties want out of negotiations, what they are willing to concede on, and what they may have compromised on is already incredibly contentious and tightly controlled information. It is unfortunately easy to imagine someone choosing to participate in peace negotiations for the specific purpose of making money in this way, rather than through any intention of actually trying to negotiate and achieve peace.
While spoilers in peace negotiations have been a problem of the genre since time immemorial and have been clearly documented in the academic literature since the 1990s, the combination of the massive amount of money that can be made through prediction markets and the total lack of regulation about participating in them means that this potential “spoiler” problem has a new motivation. While this doesn’t eliminate the possibility of peace negotiations ever happening again, it does make them more fragmented, and makes it harder to achieve even the minimal level of trust needed to begin to talk about talks. Given the stakes of ongoing conflicts and the magnitude of distress faced by civilians caught in the midst of war, this is a problem worth at least a moment of attention.
Suggested books for in-depth reading on this topic:
- Securing Peace in Angola and Mozambique: The Importance of Specificity in Peace Treaties (Dr Miranda Melcher)
- Words of War: Negotiation as a Tool of Conflict (Eric Min)
- Proscribing peace: How listing armed groups as terrorists hurts negotiations (Sophie Haspeslagh)
Dr Miranda Melcher is an expert in peace treaties and civil wars. Her book “Securing Peace in Angola and Mozambique: The Importance of Specificity in Peace Treaties” is available from Bloomsbury, based on her PhD research in Defence Studies at King’s College London. Her research identifies methods for integrating opposing forces into unified post-conflict security institutions through peace treaty negotiation and implementation, with her qualitative historical case studies focusing on Mozambique and Angola. Prior to her PhD, she completed a Master’s in Intelligence and International Security also at King’s College London as well as a degree in Political Science from Yale University.
Cover image: Secretary of State Antony Blinken speaks during the bilateral peace negotiation closing session with Armenian Foreign Minister Ararat Mirzoyan and Azerbaijan Foreign Minister Jeyhun Bayramov at the George Shultz National Foreign Affairs Training Center in Arlington, Virginia, on May 4, 2023. US Department of State image.
