If you’re a degenerate gambler then you probably already know that Polymarket is “predicting” that Trump will win the U.S. election. If you’re not a degenerate gambler, then you may not even know what Polymarket is.
The fast and simple version is that it’s a gambling website where users place bets on various events using crypto. The complicated answer is that it’s a website with VC funding, a newsletter, a comments section, an AI content generation deal, and a plan to pitch itself as the future of news. All of that is built around betting on stuff with crypto.
Polymarket is hot right now. The Wall Street Journal is sharing its modeling and breathlessly reporting on its predictions. Famed prognosticator Nate Silver signed on as an advisor and Peter Thiel helped raise $70 million in venture capital for the site.
If you want to gamble on the U.S. election, Polymarket is the hot site to do it on. But how, exactly, does it work?
Every outcome on Polymarket has a binary answer. Will it be Trump or Kamala in 2024? Will the U.S. have a case of MPox by September 30? Will Trump ever say “mog”? Will an EU country ban Telegram before October? Questions whose answers have more variation are broken apart into multiple yes or no binaries. What’s the box office for Beetlejuice Beetlejuice going to be? Less than $75 million, yes or no? More than $105 million? Will the Fed cut interest rates by September 18? What about after the election?
How Polymarket Works
Users can purchase either a yes or no “share” as a way of placing a bet on an answer. Buying a share of “Trump will win the presidency” costs 49.8¢ right now. If he wins, the user gets the difference, up to a dollar, back. So a Trump win would earn you 50.2¢ if a user locked in at 49.8.
So, someone who bought 1,000 shares of Trump at 49.8¢ would earn $50.20 if the bet pays off. And the bets are all or nothing, so a Harris win would mean someone holding Trump shares is out everything they put in.
Users can even sell off shares as the prices rise and fall. So someone could buy shares of Trump at $49.8 and then sell them if something shakes up the market and his odds on Polymarket rise.
A lot of cash is moving through the site right now. According to Polymarket, users have invested $93 million in a Trump “yes” and $85 million in a Kamala “yes.” And, weirdly, Polymarket doesn’t take a cut of any of those bets.
Then how does Polymarket make money? Well, right now, it doesn’t make much at all.
See, Polymarket sees itself as something other than just a gambling website. It wants to be the future of news. Shayne Coplan, Polymarket’s founder, has not been shy about this. “People understand what’s going on in the world better because Polymarket exists,” Coplan said in a post on X in May. “Enough of the talking heads and news-by-algorithm. We’re in a misinformation pandemic, and Polymarket presents a novel information format that is driven by financial incentives for truth, rather than engagement baiting. People want unbiased information. Polymarket delivers.”
A Bet on the Demise of Mainstream Media
But what Polymarket delivers isn’t unbiased information. It’s the chattering of gamblers laying bets. As they lay more bets, the odds change. Polymarket’s argument is that these financial incentives are a more accurate indicator of reality and the future than more traditional forms of media.
“Research has shown prediction markets to be considerably more accurate, on average, than polls and pundits,” it explains on its website. “Traders combine all available information: news, polls, and expert opinions, and make informed trades based on that combined knowledge. Their economic incentive ensures that as more savvy traders participate, the market’s price (probability) will change to more accurately reflect the true current odds.”
“That’s why prediction markets are the best source of real-time event probabilities. People around the world use Polymarket to get the most accurate odds of the events they care about, thereby gaining the ability to make informed decisions about the future,” it says. “Polymarket is the future of news.”
Coplan has hammered this in interviews. “It’s much more categorized as a derivatives platform, where the pricing of such derivatives becomes invaluable real-time info,” Coplan told Fortune in July.
Coplan seems to believe Polymarket’s path to profitability is through the news. In early August, it rolled out a partnership with Substack and began offering an Axios-style breakdown of news and information through its newsletter “The Oracle.” As part of the Substack deal, the newsletter site’s users will be able to embed Polymarket prediction tables in stories.
“Polymarket is transforming how people engage with the news. We are living through the most volatile election in memory and our forecasts are helping people understand what is happening in real-time,” Coplan said in a statement to Semafor. “News organizations are already using Polymarket as a tool online, in print and on air—having live market embeds will further help press meet the growing demand for data-driven, real-time information that people are craving more than ever.”
The Oracle reads like you’re listening to Polymarket talk to itself. Harris and Trump’s shares have been close to each other on the site since Biden stepped out of the race. That changed last week and Trump has begun to edge Harris out by fractions of a penny. Why is this happening? According to Polymarket, it’s because of Harris’ recently announced economic policies.
“The market reacted sharply to Friday’s rollout of Harris’ economic plan,” The Oracle explained in an August 19 post. “Panned by the Washington Post editorial board as ‘populist gimmicks,’ the Harris plan included Federal controls on grocery prices, a $25,000 home buying subsidy, and a $6,000 child tax credit.”
The Oracle is full of links and context provided by more traditional news outlets. Which is fine, that’s how the business works. Everyone is reading everyone else’s pieces, referencing each other, and linking back to original reporting. But that’s hardly “the future of news.”
A Dash of AI
Polymarket also teamed up with controversial AI company Perplexity to provide summaries of news for its bets. “Polymarket has become a go-to destination for people looking to access high signal trusted information on an increasingly noisy web. We see Perplexity as a company engaged in a similar mission, and so investing in deepening our partnership makes perfect sense,” Coplan told TechCrunch.
Perplexity is one of the dodgier large-language models on the market. Forbes accused it of plagiarism and threatened to take legal action. Wired did extensive reporting on the AI, calling it a “bullshit machine.” Hours after Wired published its expose on Perplexity, Perplexity had plagiarized it. Making a deal with a sketchy AI company isn’t so much the “future of news” as it is de rigueur.
Prediction markets aren’t new and neither are websites that let people gamble on the outcome of an election. It’s not, strictly speaking, legal in the United States. If you try to access Polymarket and buy a share from a U.S. IP, the site won’t let you. But VPNs exist, the shares are traded on the blockchain, and it’s possible to sidestep the site’s perfunctory restrictions. You probably should talk to your accountant about future taxes before jumping in.
A Legal Grey Area
As Polymarket’s cultural stock soars, the eyes of U.S. regulators are upon it. In 2022, the Commodities Futures Trading Commission (CFTC) hit the site with a $1.4 million fine for failing to get regulatory approval for the site. The regulator went further in May this year when it proposed an outright ban on the practice of derivative market betting on U.S. elections, saying it could harm the integrity of the election process.
That kind of thing has happened before, recently, in other countries. In the U.K., where betting on elections is legal and a part of the normal course of political reporting, the recent election cycle was plagued by a gambling scandal. The charge was that a member of Britain’s conservative party had used a site similar to Polymarket to make a bet about the proposed date of an election in the U.K.’s future. It was the gambling equivalent of insider trading.
Last week, the cops announced they hadn’t turned up sufficient evidence to charge anyone with a crime. Despite the outcome, the simple news that the police were investigating the Tories for betting on the election at all was enough to shake up the press and the public. Imagine the fallout if something similar happened in the United States.
No Future
Polymarket’s current version of “The Future of News” is a depressing one. At the top of its U.S. presidential election is the breakdown of the bets and chances for Trump and Harris. At the click of a button, users can generate a summary of the race provided by Perplexity.
“Recent polling and betting odds have seen a shift, with Trump currently favored by several bookmakers, despite Harris holding a slight lead in polling data compiled by FiveThirtyEight. Robert F. Kennedy Jr. has suspended his campaign, planning to withdraw from key states and potentially support Trump, though his strategy is unlikely to secure him electoral votes,” it says, spouting its first error. RFK JR officially endorsed Trump during his concession speech.
And below that error are 42,655 comments and growing. You see, like everywhere else on the internet, Polymarket has comments. The difference is that, in a user’s flair, you can see who they’ve put money down on.
“Former Trump staff is says Trump is ‘severely struggling’ to focus on anything—and will not be able to do a the debate,” says an account with 1,936 shares of “yes” for Harris.
“Kamala reminds me of the energy of when Obama was running for office. I wonder if she’ll win as many states as Obama?” Says another account with 23,700 shares of “yes” for Harris.
These comments go on for pages and pages and pages. There are slurs, ad hominem attacks, accusations of communism, and bot activity. It’s unruly, unregulated, and unmoderated. Some of the users have purchased shares for various candidates, but many have not. They’re apparently just there to argue with strangers online.
The future of news appears to be the exact same as the old world but with a side of AI-fueled disinformation and crypto.
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