Donald J. Trump posted colorful images on social media this week suggesting he was on his way to victory in the presidential election.
This chart shows Trump has a 64 percent chance of defeating Vice President Kamala Harris next month, which is much brighter for Trump than polls showing the election remains close. It's an outlook. Trump's post received more than 10,000 likes and fans responded with raised fist and American flag emojis.
The election odds cited by Trump came from a cryptocurrency-based gambling website called Polymarket. Gamblers at Polymarket used digital currency to bet more than $100 million on the outcome of the presidential election, turning the site into an internet gambling phenomenon for the 2024 election.
Elon Musk touted Polymarket's odds against X as “more accurate than polls because real money is at stake.” CNN and other news outlets have featured this prediction in their election coverage. And as the market swung heavily in Trump's favor, he relentlessly published the numbers on his site in an attempt to create a sense of inevitability about the election outcome.
Trump recently said that polymarkets are “so-called gambling polls.” “I don't know what that means, but it means we're doing pretty well.”
But Trump's clear lead may be illusory. Polymarket odds have shifted in his favor this month after just four accounts with usernames such as Fredi9999 and Princess Caro bet more than $30 million on Trump winning, according to an analysis of trading records by crypto data provider Chaos Labs. It started to become. Polymarket said on Thursday that all four accounts were controlled by one person, who it did not identify, but said it was a French national with a background in financial services.
Election gambling has brought increased scrutiny to Polymarket, a New York-based startup that allows people to bet with cryptocurrencies on everything from sports to Taylor Swift's love life. The legality of political gambling remains ambiguous in the United States. Polymarket stopped serving U.S.-based customers in 2022 after settling with the Commodity Futures Trading Commission to operate without registration.
There are growing concerns that the polymarket could be easily manipulated by betting to improve Mr. Trump's chances of victory. Rajiv Sethi, an economics professor at Barnard College, said the traders who made the bet may have been “willing to take losses to change public perception.” “And that could potentially impact things like donations, morale, volunteer support and turnout.”
The frenzy over Polymarket's election odds has also raised suspicions that gamblers are circumventing the ban on US users. A former employee, who spoke on condition of anonymity to discuss the sensitive topic, said it was an “open secret” that U.S. customers could place bets using virtual private networks that concealed internet users' true whereabouts.
But this attention also fuels Polymarket's business and sets it apart from other prediction websites that offer political betting markets. The startup, backed by conservative technology mogul Peter Thiel's investment firm, is nearing the completion of a new $50 million funding round that values it at $300 million, people said. Ta. In July, election forecaster Nate Silver joined the company as an advisor.
Sethi said the polymarket “has become a very important factor” in elections.
A Polymarket spokesperson said the company has taken “industry-leading compliance measures” to prevent gambling by its U.S. customers. He also said the company investigated Trump's bet and contacted the French gambler who made the bet. The person was acting based on his “personal views about the election” and was not trying to manipulate the market, the spokesperson said.
Polymarket was founded in 2020 by Shane Coplan, a dropout from New York University. He sometimes wears a Steve Jobs Lego figure around his neck. An avid networker, Mr. Koplan, 26, is a regular at cryptocurrency conferences and has an extensive network of contacts. He told colleagues at the company's SoHo penthouse office about conversations he had with WeWork founder Adam Newman and actor Orlando Bloom, two people familiar with the matter said.
In interviews on podcasts such as “Star Spangled Gamblers,” Coplan argued that Polymarket could one day become a trusted news source offering “market-based journalism.” He frequently touts his site's odds as more reliable than polls.
“This is a more useful form of gambling,” said Nick Tomaino of crypto firm 1Confirmation, which has invested in Polymarket. “We’re producing information that actually helps people.”
Much of the site's popularity is due to the high payout potential. Rival political betting site PredictIt caps bets at $850, but Polymarket allows users to place unlimited bets.
In 2021, Polymarket came under regulatory scrutiny. The startup was not registered with the Commodity Futures Trading Commission, which is trying to stamp out political gambling in the United States. Polymarket agreed to pay a $1.4 million fine to the commission and introduced so-called geo-blocking measures to prevent people in the United States from gambling on its site.
The site gained mainstream attention this summer after its users correctly predicted that President Biden would drop out of the presidential race. Mr. Coplan attended the Republican National Convention, where he was photographed interacting with Donald Trump Jr. He also hosted a polymarket event at the Democratic National Convention and posed with Minnesota Governor Tim Walz, the Democratic vice presidential candidate. At this week's fundraiser.
Mr. Koplan has been difficult to reach lately. In September, he agreed to meet with The New York Times, then canceled the week of the scheduled meeting. A company spokesperson said at the time that Polymarket faced a “very sensitive environment” and that the online discussion surrounding the company had been “red-hot.”
For much of the fall, polymarket odds suggested a close race between Trump and Harris, mirroring polling. And this month, four accounts placed large bets on the former president, resulting in wildly different odds.
On Oct. 11, Trump posted a screenshot of a polymarket showing he had a 55.5 percent chance of winning the election. On Monday, he posted a new screenshot showing the odds had increased to 64 percent.
Cristian Pérez Ramírez, who worked at the company from 2021 to 2023, said the increased attention has made Polymarket vulnerable to bad actors, adding, “With enough motivation and enough capital, they can be easily manipulated.'' I can do it,” he said.
A Polymarket spokesperson said users who bet on the election “agreed not to open future accounts without notice.”
And the company's investors dismissed concerns about manipulation, saying it takes a lot of money to move markets over long periods of time and that users would be more willing to bet against them if the odds were lopsided.
“If you think the market is being manipulated, there's a profit incentive to correct prices,” said Joey Klug, an investor at Founders Fund, which Mr. Thiel founded and supports Polymarket.
Polymarket plans to close a $50 million funding round led by venture capital firm Blockchain Capital in the coming weeks, people said. The company is considering creating its own cryptocurrency, and investors in the new funding will have the option of receiving a portion of those tokens, two people familiar with the startup said. (Some funding details were previously reported by The Information, and a spokesperson said the company has “no immediate plans” to create a coin.)
Polymarket is not making any money, but is considering charging customers a fee, one of the people said. The company is also exploring ways to legally operate in the U.S. after a smaller competitor, Calci, won a lawsuit against the Commodity Futures Trading Commission in September.
For now, Koplan seems to be enjoying his company's increased profile. Mr. Musk, a vocal supporter of Mr. Trump, published Polymarket's chart on X earlier this month, writing, “Win is not enough. It must be an absolutely decisive victory.”
Koplan reposted Musk's message with a surprising comment:
“I had to see it to believe it,” he wrote.
kitty bennett Contributed to research.
