Following the Supreme Court’s legalization of sports gambling in 2018, we have seen an explosion of problematic gambling, harassment of athletes and other officials and corruption. These issues have led to many leagues and teams starting programs to curtail some of the byproducts of problem gambling. However, one area under-discussed in the current gambling landscape is the prevalence of so-called prediction markets like Polymarket. With a design similar to many sports betting platforms — they do offer sports betting — Polymarket provides an option to bet on many other real-world events, representing an immoral new way to spread misinformation.
Established in 2020 by Shayne Coplan, Polymarket is a crypto-based betting platform allowing users to place bets on actual world events. These events include anything from the presidential election to how many times Elon Musk will tweet in a week. This is not the first business to provide a platform for betting on elections. Back in 1884, newspapers printed betting odds as a way of approximating who would win the election before high-quality polling became available. However, what makes Polymarket unique is the sheer number of events you can bet on, and that sheer number of events makes Polymarket immoral. Because under the surface of Elon Musk’s tweets, international elections and cabinet confirmations, you will see bets on how large the LA wildfires will be and whether Israel will invade its neighbors.
After the shock of seeing these horrible events being bet on, it’s worth asking who benefits from these bets. It’s not the victims of these tragedies, many of whom would appreciate some of the over $3 billion bet on Polymarket going to a more productive place than the bank account of gamblers. It’s also certainly not the traders. Betting markets are, by definition, an equal sum gain, so no new wealth is being generated, just being moved around, and it is probably not even the Polymarket platform. These markets generate money through transaction fees. Still, on a platform where over $1 billion have been bet on the Super Bowl, the transaction fees generated from these props are a drop in the bucket. So why do they allow these immoral bets? Why should we allow people to bet on the scope of tragedies, and why should we give people a reason to root for a fire to get larger or go uncontained for longer?
The topic of betting markets opening the door for corruption is nothing new. Referees and athletes have a long history of being barred from their sports due to betting on games they are playing or officiating. One of the motivations behind banning sporting betting with the Professional and Amateur Sports Protection Act of 1992 was to protect sports from that kind of corruption. If sports betting receives constant scrutiny, why do we allow Polymarket and other immoral platforms to exist without scrutiny or regulations in our political system? While we do, in 2022, the Commodity Futures Trading Commission reached a settlement with Polymarket that prevented it from operating in the United States. However, due to the decentralized nature of Polymarket, it is easy to use a VPN to circumvent a potential ban. In addition, the ban has not stopped American political figures from accepting money to promote the site, with popular pollster Nate Silver and YouTube news show The Young Turks having both received money to promote the platform to their primarily American audience.
YouTube shows and X posts are not the only places where Polymarket appears. Throughout the 2024 election, Polymarket has positioned itself as a betting market and election predictor, with many news organizations listing them next to accredited polling firms when predicting how the election would shake out. This desire to be viewed as more than a gambling platform has gone as far as to affect how the website lists its odds, where instead of showing the odds as a fraction or money line like the vast majority of other betting sites, they display their odds a percentage to make their markets look similar to other prediction sites based off of polling or other factors — not gambling.
This does not necessarily mean that the Polymarket is wrong to display their odds that way. As mentioned previously, newspapers used betting odds to track elections before reliable polling. However, we now live in an age with reliable polling and other techniques to help experts predict elections without needing millions of dollars to be lost in betting markets. In addition, due to the polymarket’s decentralized nature, its election predictions based on the odds were an outlier even among smaller political betting websites, primarily due to so-called “whales” dumping money into the market with the express purpose of making it appear that Trump has the more significant chance of winning than he did, even if he did end up winning the election. This manipulation of the odds can go from dissecting to dangerous when combined with a platform that hosts live odds on natural disasters and wars, especially when the people betting on these markets are gamblers, with little expertise or experience with the events they are betting on.
It is clear that Polymarket’s decentralized nature, combined with its easy-to-manipulate odds and apparent lack of consideration for the types of prop bets it offers, makes for an increasingly dangerous combination. With its new attempts to be seen as a reliable prediction market, people will get hurt trusting Polymarket’s predictions in more ways than one.
This post was originally published on here
