One Former Trader Says Prediction Markets Profit From Insider Bets

After pointing to heavy betting before the announced conclusion of an HBO documentary on Bitcoin and a Taylor Swift engagement market, a former finance industry worker, speaking from his own account of working in the industry, offered his explanation for why anonymous informed bets keep showing up on Polymarket, a site where people wager on future events.

“The businesses that run these prediction markets want you to insider trade,” according to him, presenting the claim as his own inference from industry experience rather than citing company statements or documents.

His argument starts with fees. Polymarket charges no fee right now in an effort to build trading volume, liquidity, and trust. The longer term goal is to sell accurate forecasts to institutional clients through subscriptions and live data feeds, competing with services like Bloomberg Terminal, the market data system that costs Wall Street firms thousands of dollars a month. A market that consistently predicts elections, company earnings, and other events would have data worth that kind of price, and live odds could feed automated stock trading or arbitrage between a prediction market and stocks.

For him, inside information sharpens those odds. Someone who worked on a television project or knew of an engagement in advance and placed huge bets pushes prices toward the true outcome. Polymarket’s fine print nowhere explicitly prohibits insider trading, in his reading, an omission he interprets as deliberate because informed trading makes markets more predictive.

The tension, as he describes it, is a delicate balance. The platforms also quietly welcome speculators with inside knowledge who bet big and push prices in the right direction, while still needing market makers, professional traders who post both buy and sell offers and provide liquidity so others can trade.