Garrick Wilhelm joined the crowds piling into prediction markets last month. He quickly came to regret it. The British Columbia resident signed up for Polymarket and began wagering on events in the Middle East. One available bet was on whether Israel and Hezbollah would reach a cease-fire. Wilhelm put down $567, reasoning that the militant group would never agree to such a deal. “It seemed like a no-brainer,” he said. When Israel reached a truce with the Lebanese government, though, some traders argued that it counted as a deal with Hezbollah. Wilhelm, reading the rules carefully, disagreed.  With millions of dollars at…

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