Democrat or Republican, which team should you trust? The uncertainty surrounding the US presidential campaign excites betting enthusiasts. In the midst of this enthusiasm, we find the Polymarket site, a predictive market platform. It attracts thousands of bettors who can bet cryptocurrencies on the winner of the elections.
How predictive markets work
How does Polimercado work? The site bases its concept on predictive markets. This is a similar principle to betting sites. Except that bettors, instead of betting money directly, must buy stocks that pay in cryptocurrencies (more precisely, in USD Coin). They bet these stocks on markets with diverse and varied themes: the winner of the Champions League, the probability of Iran hitting Israel or, currently in fashion, the results of the US presidential elections.
Internet users will bet by buying shares of candidate Trump or candidate Harris. Until the election results, the stock price will vary depending on the probability of victory for each side.
The more likely an event is to occur, the more the actions supporting it are worth. Thus, the stock will tend to zero if the probability of victory is zero, to one dollar if the candidate has a great chance of winning. In the end, the owners of the winning stocks pocket the money from the losing stocks.
More or less reliable estimates
The platform offers functionality that may lead to misinterpretations. At the time a market is created, Polymarket displays the change in the number of shares in each camp as a percentage. The resulting graph can be interpreted as a form of survey. However, it must be taken into account that the opinion of each bettor is proportional to their number of actions.
Thomas Miller, an American data scientist, stated in Fortune that these statistics have some reliability. In the context of a political prediction market, bettors react live to certain events (such as a meeting or a speech). They remain particularly attentive to voting trends to ensure they pocket the bet.
With Harris and Trump neck and neck, the US presidential campaign has piqued the interest of online bettors. Various markets on the topic are very popular on Polymarket. Please note that the site is not available in the United States, therefore most bettors are from outside the country.
A Frenchman weighs in on the statistics
The New York Times also highlighted a French bettor. He created four accounts on the Polymarket platform and owns the equivalent of $32 million worth of shares in a single market across all of these profiles. This market is currently the most popular on Polymarket. Titled “Winner of the 2024 Presidential Election”, it invites bettors to bet their shares on the next winner of the US presidential election, on November 5.
While shares worth $2.7 billion are at stake in this market alone, the value of the Frenchman’s shares represents 1.2% of the resulting percentage. A large part of the pie was decided to bet on candidate Donald Trump. In the percentage as of Wednesday, October 30, the Republican candidate would win 67% against 33% for Kamala Harris. These statistics do not correspond at all with those of traditional polling institutes, which place voting intention at 48.2% for Harris and 47.2% for Trump.
Questioned by the New York Times, Polymarket indicated that it had found no evidence of an attempt at market manipulation by the individual. The platform adds that the Frenchman “adopted a position based on personal opinions about the elections.”
This influence calls into question the reliability of a market that claims to be “predictive”, but in which those who own the most shares drastically tip the balance. Polymarket, however, points out to the New York Times that predictive markets are in no way equivalent to traditional surveys. In total, the Frenchman, whose identity is unknown, bet more than 51 million dollars to support the Republican side in several markets linked to the American presidential elections.
Source: BFM TV
