iirc polymarket doesn't explicitly rule against this, and neither does the law. prediction trading like this operates as "commodities" trading, so they have no obligation to prevent this, and indeed they have an financial incentive to let it continue (assuming others don't leave the platform!)

> neither does the law

I don’t think that’s right. Prediction markets fall under CFTC oversight, and the CFTC absolutely has insider trading rules. We just haven’t seen any enforcement yet. Partly because the space is still new, and partly because enforcement priorities have been uneven lately (to put it mildly).

The CFTC has already signaled it’s starting to look more closely at insider trading in prediction markets. It's almost certainly just a matter of time. It's pretty likely a future administration will clamp down on this, if the current one doesn't.

I would go even further and say that it's a vital part of prediction markets as the intended theoretical goal is accuracy of predictions.