U.S. Election Betting: Polymarket 'Manipulation' Claims Miss the Mark

The manipulation narrative is an attempt by mainstream media to discredit Polymarket’s election odds and control the narrative, one expert said.

CoinDesk’s deep dive into the U.S. election betting markets on prediction markets, online sportsbooks and stock markets, plus analysis from traders, lawyers and economists.

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CoinDesk is tracking the U.S. election betting markets across prediction markets, online sportsbooks and the stock market. Here's what the traders, lawyers and economists are saying.

After the 2020 presidential election, Donald Trump repeatedly alleged that the results were rigged against him. Now, as the 2024 campaign heats up, mainstream media outlets are floating a similar theory about a different sort of election market.

“A French gambler’s $50m of bets inflated Trump’s odds — and is threatening democracy” gasped a recent headline in the U.K. Independent newspaper. The Wall Street Journal and New York Times have been comparatively measured in tone, but also gave airtime to the theory that someone has been manipulating Polymarket to influence turnout and morale or give Trump an excuse to challenge the results should he lose again.

To be sure, Polymarket has been signaling a higher probability for the Republican candidate defeating Kamala Harris on Tuesday than forecasters and other prediction markets. And Polymarket also confirmed to the Times that a single French national does control several accounts that have been making large bets on Trump winning. That trader told the Journal he had "absolutely no political agenda" and was just trying to make money.

For its part, Polymarket told the Times it had found no evidence of manipulation. And several experts in prediction markets interviewed by CoinDesk said they saw little if any.

First of all, the French whale's use of multiple accounts suggests an attempt to minimize slippage, or prices moving against a trader placing a large order.

"If the goal was to move the price, you'd do the opposite," said Flip Pidot, co-founder and CEO of American Civics Exchange, an over-the-counter dealer in political futures contracts. "Instead of having several accounts trading strategically with limit orders, you'd just keep plowing money in blindly and let yourself get filled at worse and worse prices, since that would be optimal if your goal was to artificially inflate the price."

If someone did try to manipulate Polymarket for political reasons, they would be unlikely to succeed more than temporarily, experts told CoinDesk. (A Fortune article alleged a different sort of manipulation — wash trading — that appears to be driven by users trying to earn airdrops of a potential future Polymarket token.)

CoinDesk is tracking the U.S. election betting markets across prediction markets, online sportsbooks and the stock market. Here's what the traders, lawyers and economists are saying.

After the 2020 presidential election, Donald Trump repeatedly alleged that the results were rigged against him. Now, as the 2024 campaign heats up, mainstream media outlets are floating a similar theory about a different sort of election market.

“A French gambler’s $50m of bets inflated Trump’s odds — and is threatening democracy” gasped a recent headline in the U.K. Independent newspaper. The Wall Street Journal and New York Times have been comparatively measured in tone, but also gave airtime to the theory that someone has been manipulating Polymarket to influence turnout and morale or give Trump an excuse to challenge the results should he lose again.

To be sure, Polymarket has been signaling a higher probability for the Republican candidate defeating Kamala Harris on Tuesday than forecasters and other prediction markets. And Polymarket also confirmed to the Times that a single French national does control several accounts that have been making large bets on Trump winning. That trader told the Journal he had "absolutely no political agenda" and was just trying to make money.

For its part, Polymarket told the Times it had found no evidence of manipulation. And several experts in prediction markets interviewed by CoinDesk said they saw little if any.

First of all, the French whale's use of multiple accounts suggests an attempt to minimize slippage, or prices moving against a trader placing a large order.

"If the goal was to move the price, you'd do the opposite," said Flip Pidot, co-founder and CEO of American Civics Exchange, an over-the-counter dealer in political futures contracts. "Instead of having several accounts trading strategically with limit orders, you'd just keep plowing money in blindly and let yourself get filled at worse and worse prices, since that would be optimal if your goal was to artificially inflate the price."

If someone did try to manipulate Polymarket for political reasons, they would be unlikely to succeed more than temporarily, experts told CoinDesk. (A Fortune article alleged a different sort of manipulation — wash trading — that appears to be driven by users trying to earn airdrops of a potential future Polymarket token.)

Expected value

First, there is the concept of “expected value," where investors take advantage of a trade that would be profitable in