Polymarket Wants to Be the House — Critics Say That’s a Problem

Prediction market Polymarket is establishing an internal market-making team to trade directly against its users, a move critics warn blurs the line between a prediction market and a traditional sportsbook. This shift, which follows a similar move by rival Kalshi, appears motivated by revenue generation rather than product improvement, as Polymarket currently does not charge fees. Experts, like Rutgers University professor Harry Crane, suggest this strategy is short-sighted, noting that the potential profit is small relative to the company's valuation and could create significant PR and legal issues, citing a class-action lawsuit against Kalshi. Furthermore, introducing an in-house desk undermines Polymarket's identity as a neutral exchange reflecting collective wisdom, instead making it resemble a sportsbook where the operator builds in an edge. This risks eroding the platform's reputation as a reliable barometer of real-world probabilities, which fueled its growth during the 2024 election cycle. Concerns also arise regarding potential conflicts of interest and unfair advantages, similar to the FTX-Alameda dynamic, over access to order-flow data.

(Source：CoinDesk)