Polymarket Tightens Checks on US Users Amid Rising Election Odds for Trump
Crypto predictions platform Polymarket is reportedly increasing its scrutiny to ensure that large bets on the United States presidential election are being placed by non-US users, as American users are prohibited from using the platform.
Polymarket Ensures Compliance with Rules
According to a report from Bloomberg on October 22, Polymarket is re-examining the details of its users, especially those placing hefty wagers, to ensure they are following its rules. While the platform has mechanisms in place to prevent US users from accessing it, there have been concerns that American residents might be bypassing these restrictions using virtual private networks. This has led Polymarket to enhance its due diligence efforts.
Large Whales Skew Odds in Favor of Trump
This move comes amid speculation that a few large whales are tilting the odds for the upcoming US presidential election in favor of the Republican candidate and former President Donald Trump. Nearly $2.3 billion in bets have been placed on Polymarket’s “Presidential Election Winner 2024” market, which currently favors Trump (63.7%) over Vice President Kamala Harris (36.2%).
Whale "Fredi9999" Attracts Attention
The location of Polymarket whale "Fredi9999" has garnered significant attention, as more than $20 million has been wagered on Republican outcomes so far. Trump also leads Harris on rival prediction platform Kalshi, with a 60% lead.
Discrepancy Between Crypto Prediction Markets and Voter Polls
However, Trump’s lead in the crypto prediction markets does not currently align with most voter polls, including a Reuters poll that puts Harris in the lead with 46% to Trump's 43%.
Polymarket's Results Not Manipulated, Says Kalshi Founder
In response to media scrutiny of Polymarket, Kalshi founder Tarek Mansour stated that Polymarket's results are accurate and not influenced by inorganic manipulation. He noted that the median bet size on Harris is larger than that on Donald Trump, with the median bet for Harris being $85 compared to Trump's $58.
Foreign Money Influencing Polymarket's US Election Market
Billionaire and Polymarket investor Mark Cuban stated that most of the bets placed on Polymarket's US election market are coming from overseas. As a result, they may not accurately reflect the sentiment of eligible voters. Cuban made this statement in an interview with CNBC Squawk Box on October 21.
Polymarket's Settlement with US Regulator
Earlier in January 2022, Polymarket reached a $1.4 million settlement with the United States commodities regulator for offering over 900 event-based binary options event markets without obtaining registration. In a separate case, the Commodity Futures Trading Commission partially lost a lawsuit it filed against Kalshi in September. The court ruled that the commodities regulator had "exceeded its statutory authority" by ordering the US-based entity to suspend its election markets.
Bottom Line
Crypto prediction platforms like Polymarket are facing increasing scrutiny due to their potential influence on election outcomes. While these platforms offer an interesting perspective on election odds, it's crucial to remember that they may not accurately reflect the sentiment of eligible voters, especially when large bets are placed by non-US users. What are your thoughts on this matter? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
