The speculation surrounding Donald Trump’s odds on Polymarket being manipulated for political gain has been making headlines in mainstream media recently. However, experts in prediction markets have shown little evidence of such manipulation and believe that any attempts to rig prices would likely be short-lived.
The discourse surrounding Polymarket’s odds on the upcoming U.S. election has drawn comparisons to Trump’s complaints about the 2020 presidential election. Some media outlets have suggested that someone may be manipulating Polymarket to influence voter turnout, morale, or provide Trump with an excuse to contest the results if he loses again. However, Polymarket has denied any evidence of manipulation and experts have expressed skepticism about these claims.
One aspect that has raised suspicions is the involvement of a French national who controls multiple accounts placing large bets on Trump winning. While the trader claims to have no political agenda and is solely motivated by profit, the use of multiple accounts suggests an attempt to minimize slippage. Experts have noted that if someone were trying to manipulate Polymarket for political reasons, they would likely not succeed in the long term.
The concept of “expected value” plays a crucial role in prediction markets, where traders take advantage of profitable trades in the long run. The imbalance in liquidity between Trump and Harris on Polymarket has made it easier to inflate odds in favor of Harris due to the smaller amount of capital required to move the needle for her odds.
Moreover, the participation of larger trading firms in Polymarket has coincided with Trump’s outperformance, indicating that smart money is backing certain trades. The fragmentation of betting across multiple platforms allows for arbitrage trading, ensuring that prices remain efficient and reflective of reality.
While there have been allegations of potential manipulation in Polymarket, experts believe that cognitive biases among participants and different sources of information may be contributing factors. The waiver of trading fees on Polymarket has made it easier for traders to arbitrage between contracts and weed out mispricing.
Ultimately, the narrative surrounding manipulation in prediction markets may be an attempt by legacy media to discredit these platforms, which threaten their control over the narrative. Despite the speculation, experts remain skeptical of claims of widespread manipulation in Polymarket and other prediction markets.
