Polymarket Controversy: Gambling, Predictions, and the FBI Raid
- Michael Carlisle
- Nov 15, 2024
- 8 min read
If you are like me, you probably know fuck all about a website and company called Polymarket. This company came into my view this morning because the FBI raided the house of the CEO, and apparently this guy can predict the fucking future based on some of the headlines I read. So, my interest was immediately peaked, and I had to find out more. So, let's take a dive into the rabbit hole that is Polymarket together.
Ok, the first thing you will see after a google search is the company's website and then a list of stories telling you that the CEOs house was raided today. Open up the website first! This is very important to follow along so we can understand what the fuck is happening on this "gambling" website that operates like the stock market.
This is Polymarket and it's a weird combination of gambling and stock market that is not available for US Citizens to place "wagers" on. In the first window featuring Jake Paul and Mike Tyson we can see that currently the odds of Jake Paul winning are placed at 64%. So, if I were in a different country, and I wanted to "bet" on Jake Paul to win I could buy "shares" of Jake Paul at 64 cents on the dollar. If he wins, the odds go to 100% and my shares go to a value of 1.00, essentially. Thats a low down, dirty explanation for the other dummy thicc idiots like myself reading this. By the same token if I thought Tyson has a better than 29% chance to win I can buy Tyson at .29 cents and if he is performing well during the fight and his odds increase to 55% I could sell my "shares" MIDFIGHT and make my money and not leave my earnings to chance.
"But Mike, you can do that on FanDuel by cashing out early!"
You're right! You can do that, but what you can't do is fractionally sell off your bet like you can with Polymarket.
Let me explain. So, if I have 1000 "shares" of Tyson at .29 cents then I have invested 290 on Tyson. If Tyson is fighting well and by the fifth round had increased his odds to 55% or .55, my 1000 shares are now worth 550 dollars. If I can sell someone 528 shares at .55 cents I can recoup all my original investment and let the rest of it ride or look for another buyer later. .55 x 528 = $290.40 <---- Here's the math. Now I still have 472 shares of Tyson and I can do what I want with it.
Ok, great. Another gambling website... great rabbit hole...
Well, we're just getting started because this "gambling" website is predicting shit with a crazy high accuracy and it's not just doing it with sports. For instance, it accurately predicted that President Joe Biden would step down from the nomination and that Trump would win in a landslide. Sounds insane right? Right!?
So you need to get to the fourth, fifth and beyond pages on google to find articles about Polymarket before the home of Shayne Coplan's was raided. Once you get there, you'll find some articles about Polymarket and how it was skewing odds in Donald Trump's favor for the election, and it was showing that Trump would win the election by a land slide and was the only place doing that.
This is where the Polymarket Controversy begins. One piece in particular is a very interesting read. An article in Fortune Crypto written by Leo Schwartz, released on October 30th with a headline Exclusive: Election betting site Polymarket gives Trump a 67% chance of winning but is rife with fake ‘wash’ trading, researchers say | Fortune Crypto lays out the ground work for why the "gambling" website might not be accurate and makes claims of "wash trading" which they explain is a way to manipulate the markets. Here's a direct quote from the article, "In separate investigations completed by the blockchain firms Chaos Labs and Inca Digital and shared exclusively with Fortune, analysts found that Polymarket activity exhibited signs of wash trading, a form of market manipulation where shares are bought and sold, often simultaneously and repeatedly, to create a false impression of volume and activity." So essentially, they are accusing Polymarket of allowing market manipulation.
But that isn't the only article like this. You can check out Polymarket: Why Trump-backing betting market Polymarket might be a scam | World News - Times of India
These articles only begin the story though. Because once these hit pieces were put out investigations were launched into FOUR (1) Whales who were apparently making all this money and manipulating the market. How four whales betting $25m on Trump are skewing Polymarket’s election odds – DL News
But here's the problem, it wasn't 4 people who were manipulating the market, it was ONE guy who kept buying more shares because he knew what was happening and that the media was lying to people about the chances and what polls were doing. On top of that, this individual found a fatal flaw in the way the poll was being conducted.
This excerpt from the Polymarket Wikipedia is also a fun read on the Polymarket Controversy
"A few days after the 2024 U.S. presidential debate held on June 27, 2024, Polymarket predicted a 70% chance that Democratic candidate Joe Biden would withdraw from the 2024 U.S. presidential election (an increase from 20%), weeks before he officially announced his withdrawal.[14] By contrast, on August 5 Polymarket showed 68% odds Kamala Harris would pick Pennsylvania governor Josh Shapiro as her running mate, with Minnesota governor Tim Walz at 23% odds. Harris selected Walz the next day.[15][16][relevant?]
On October 7, 2024, Polymarket showed a spike in the odds Donald Trump would win the 2024 election, to 53.3%, with a corresponding decline in Kamala Harris's odds, to 46.1%. Two Polymarket competitors continued to show Harris with better odds of winning, at about 51%; Polymarket also showed a slight edge for Harris throughout September. That day, the FiveThirtyEight simulation model found Harris had a 55% chance to win the election, while elections statistician Nate Silver said his model gave Harris 54.7% odds. Forbes reported on theories for the Polymarket divergence, including that one or more major wagers had been placed on Trump, possibly because Elon Musk had spoken at a Trump rally two days earlier, and had previously promoted Polymarket. On the day of the Trump spike, Musk reposted an X post that asserted "Kamala is collapsing before our eyes." However, due to Polymarket lacking a cap on individual investor amounts, large wagers by one or a few bettors may not reflect a material change in the election landscape. Silver, a Polymarket advisor, said the shift in Trump's favor was a "larger swing than is justified."[17] Polymarket competitor Predictit had since shown Trump with better odds of winning after previously favoring Kamala Harris.[18]
The divergence continued into mid October 2024, showing Trump with 60% odds on October 18. The Wall Street Journal reported the market moves might be a mirage created by four bettors with about $30 million in Trump wagers, though the bets were not necessarily nefarious. The four bettors behaved in similar fashion, leading at least one blockchain analyst to conclude there was "strong reason to believe they are the same entity." Polymarket initiated an investigation of potential market manipulation for an influence campaign in favor of the Donald Trump 2024 presidential campaign.[19] The company confirmed on October 24 that the four accounts were controlled by one French trader with "extensive trading experience and a financial services background," finding no evidence of efforts at market manipulation.[20] The trader ultimately won $85 million upon Trump's victory.[21]
This brings us to November 13th when the raid of Coplan's home took place and his computers, cell phone, and other electronics were confiscated.
Why would this person's home be raided? It seems they are being accused of allowing US person to gamble on their site, when it's not supposed to be allowed. This display shows that I affirm I am not a U.S Person as long as I am not trading. Let's see if I can.... lie...
Nope, sure couldn't. Not like a normal American anyway. But apparently people are circumventing the issue with VPNs. Now I'm not going to go diving into VPNs and illegally gamble on Polymarket. But I will use it, more on that later. However, I know that you can gamble on offshore betting sites when you are in a state without legal gambling depending on how good that VPN is. And I know this from a friend 😉
An Excerpt from NBC
"The company’s markets wagered correctly and controversially in Donald Trump’s favor in bets on who would win the presidential election, even though opinion polls showed a tight race.
Coplan, 26, was home when numerous agents entered his apartment Wednesday and he turned over his devices to authorities, the source said, adding that he has not been arrested or charged. The source said it is not clear whether Coplan or Polymarket are targets of an investigation.
“New phone, who dis?” Coplan posted on X after the raid.
Polymarket, which Coplan founded in 2020, has recently been the subject of intense debate and scrutiny over its creation of election betting markets. It brought in more than $3.6 billion from bets placed on the presidential election, including $1.5 billion on Trump and $1 billion on Vice President Kamala Harris, according to an NBC News analysis.
Speculation has swirled around the identities of major bettors who wagered on Trump and whether or not the odds and the existence of the markets could have had an effect on voters.
Though U.S. election betting is newly legal in some circumstances, Polymarket is not supposed to allow U.S. users after the Commodity Futures Trading Commission halted its operations in 2022, but its user base largely operates through cryptocurrency, which allows for easy anonymity.
Coplan has continually defended the site as “nonpartisan,” blaming the Biden administration and the recent Democratic loss for the raid.
“It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents,” Coplan said on X. “Polymarket has provided value to 10’s of millions of people this election cycle, while causing harm to nobody.”
Where it all comes together. Grab your tin foil hats
So, the CEO of Polymarket believes he is being targeted by the Justice Department as retribution for accurately predicting the election, to such a high degree that it appears they knew the entire time that people were lying. This is where the metal meets the meat. Because from the outside looking in, it would appear that they are absolutely right but also that they didn't do a good job of safeguarding their site to prevent Americans from getting on there. However, to actually make it impossible for the American People to access the site the government would have to close down access entirely and that would be them censoring the internet. What makes it even worse it the fact that Polymarket calls into question the validity of the information being shared with the American people as a whole. We were told it would be a close tight race. That was a lie. It was a lie of epic proportion or the people who give us information know the same amount of fuck all as you and I.
Practical application for US Persons
So, there is something very weird going on with this company and the way it can predict outcomes. It is currently the largest and most accurate prediction model in use in the world.
But you can't actually bet on the site. However, you can use the information from this site to help guide your bets on places like FanDuel. Below are the current odds for Tyson v Paul at the time of this writing.
And here's the current odds at Polymarket, with 17.6 Million in "wagers" placed.
So, if you like to bet the ML Polymarket can be a really valuable tool to help make up your mind on where you want your money to go and you can also track trends. Trends like DJT is going to slam dunk Kamala in the US election.
Anyways, thanks for stopping to read my ramblings on our journey down the rabbit hole of Polymarket. You guys want to do some gambling?
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