He made $100,000 to elect the Pope. Polymarket, or gambling in the disguise of the stock market

niepoprawni.pl 3 weeks ago

End of December 2025. Gannon Ken Van Dyke, a U.S. Army soldier associated with peculiar operations, establishes an account at Polymarket, 1 of the largest predictive markets. He doesn't buy stock, he doesn't trade oil contracts and he doesn't effort to catch another hoss on cryptocurrency. He puts money on a circumstantial question: whether Nicolás Maduro, a Venezuelan leader, would cease to regulation the country before the end of January 2026. A full of over $33,000 is spent on this scenario.

For the Polish reader, 1 reservation is important: Polymarket is not just an investment platform. Its domain is included in the registry of parties offering gambling games contrary to the Act, operated by the Ministry of Finance.

However, according to the D.A.'s office, Van Dyke was not an average user who, after reading a fewer studies, found that the marketplace had misjudged the situation. He had access to information that the average player at Polymarket couldn't know. He was active in the planning of Nicolás Maduro's interception operations.

On the morning of 3 January 2026, the operation was successful. Contracts were settled in his favor, and the prosecution claims that Van Dyke earned over $400,000.

In April 2026, he was charged with criminal charges. These included, inter alia, the usage of confidential government information to accomplish asset advantages, fraud in trading contracts on Polymarket and the transfer of funds from these transactions. Van Dyke himself did not plead guilty.

There was a real marketplace on Polymarket concerning Maduro's fate. It shows how rapidly the price of the contract can scope a level of close certainty erstwhile information comes to the conclusion of the case.

Van Dyke's case was not isolated. The bigger specified predictive platforms become, the more akin questions will arise. What can we do about a place where an official, a soldier, a politician or individual who is just close to a major event can have an advantage?

The mechanics looks seemingly innocent. individual puts money on a circumstantial script and wins if he's right. The problem only begins erstwhile we ask where this right came from.

How do predictive markets work?

Imagine that on the platform the question arises, "Will Fed, or the central bank of the United States, reduce interest rates in June 2026?". The price is 0.62 USD.

You buy 1 contract for 62 cents. If Fed actually drops your feet in June, you get a dollar. You make 38 cents. If he doesn't lower his feet, you lose the full stakes.

That's the basic mechanism. Each consequence ‘yes’ or ‘no’ has a price, usually from 1 to 99 cents. The higher the price, the more likely the marketplace assigns to the event. The 62 cent contract so means that the marketplace estimates the chance to lower its feet at 62 percent. In practice it looks as follows. Each variant has its own price, and next to it you can see the probability assigned to a given scenario. In this case, the investor does not simply respond in a survey. He buys a contract and risks his own money.

The difference with a simple survey is fundamental. In the survey you can mark any answer and hazard nothing. On specified a platform, money is paid for your own opinion. If you think the probability of a simplification is 80 percent, and the marketplace values it at 62 percent, you can buy a contract and wait. If you're judged correctly, you'll get paid wrong.

This is why supporters of this model claim that contract prices are better expectations than polls. People express their views differently erstwhile they pay for their mistake with their own money.

Similarly Kalshi, the second large platform from this segment. To the user, the difference may seem small, due to the fact that it is again a contract for the result of the event, but from the legal side it is simply a different design: Kalshi is simply a regulated U.S. stock exchange of events contracts, and Polymarket grew out of the crypto ecosystem.

However, with this mechanism, a regulatory question rapidly arises. The same contract looks a bit like a financial instrument, and a bit like a bookie shop. For the user is 1 click. For regulators, it is simply a dispute over who is to supervise the full market.

Why did this marketplace abruptly grow?

A fewer years ago, the full section was easy to ignore. A small cryptic, a small betting, any net fun for people who like to bet everything from election to weather. By 2026, this description is already very outdated.

According to TRM Labs, a company analyzing data from blockchain and the cryptic market, the monthly volume of transactions in predictive markets increased from around US$1.2 billion in early 2025 to over US$20 billion in January 2026. Growth is well seen on Token Terminal data. The illustration shows the nominal value of Kalshi (green) and Polymarket (blue) contracts alternatively than the gross of the platforms themselves. It was a comparatively low liquidity section in mid-2025. Since autumn 2025, however, the turnover began to grow rapidly, and in spring 2026 individual periods on the illustration were already reaching respective billion dollars.

There's besides a change of power. Polymarket has long been the most recognisable platform, but since the beginning of 2026 an expanding share of the volume has been generating Kalshi. It's crucial due to the fact that we're not just talking about a crypto-platform to bet events, we're talking about a section that starts moving to a regulated financial world.

An crucial signal came from Wall Street. Intercontinental Exchange, owner of NYSE's fresh York Stock Exchange, invested US$1 billion in Polymarket in October 2025 and added another US$600 million in March 2026. ICE besides announced the acquisition of part of the shares from existing investors. In practice, this meant that 1 of the world's most crucial financial institutions began to look at Polymarket not only as a platform for betting events, but besides as a possible origin of valuable data about ]]>investor expectations]]>.

Another way went Robinhood, a popular American brokerage app. The company did not invest in Polymarket or Kalshi, but began to make contracts for events in its own application. In the first 4th of 2026 it showed $147 million in the category of another transaction revenues, which according to the company consisted mainly of specified contracts. This was 320 percent more than the year before. At the same time, Robinhood's revenues from cryptocurrency dropped by 47 percent, so for the company, the contracts for events became 1 of the fresh ways to diversify business.

Other large companies are besides starting to be curious in the subject. Coinbase, 1 of the largest cryptocurrency exchanges, and Webull, an American brokerage platform, test or make their own predictive contract solutions. According to Reuters' reports, Kalshi after the final circular of backing was valued at US$22 billion, and Polymarket sought capital at the valuation of about US$15 billion.

There's a simple mechanics behind this growth. A larger number of users means greater liquidity, and greater liquidity makes contract prices look more credible. Then media, investors, and analysts frequently go for them. This in turn attracts more users.

The landmark minute was the US presidential election in 2024. Polymarket was then widely quoted alongside the polls, as its prices kept showing how the marketplace values candidates' chances. erstwhile results began to flow, contract prices faster than conventional media showed that Trump's triumph became Trump's most likely scenario.

This does not mean that specified valuations are always accurate. That moment, however, gave them something that was missing earlier. Reliability in the eyes of the public.

Who truly plays in this market?

At first glance, everything looks very democratic. Everyone sees the same question, anyone can buy a contract for a fewer twelve cents, and anyone can be right.

Except just clicking “yes” or “no” does not mean that everyone is playing the same game. 1 user bets after work, the another has a team, data, algorithms and all day looking for errors at prices.

Samuel Wood-Soloff is simply a good example. He graduated from Princeton, 1 of the most prestigious colleges in the United States, and later together with 4 post-graduate colleagues he founded a company that exclusively deals in predictive markets. They usage external databases and algorithms. They besides have an advantage which the average user mostly does not have. They can spend days looking for mistakes in contract prices.

Wall Street diary ]]>described professional traders]]> operating on a akin level. 1 of them said he's doing up to 60 transactions a minute and he can modify offers respective twelve times a second. It doesn't look like a loose bet after work. Rather, it is simply a marketplace where faster and better prepared participants can systematically exploit the mistakes of others.

One of the biggest players on Polymarket is the trader acting under the nickname Domer. He was previously a professional poker player, and his communicative was described by 60 Minutes, a well-known CBS station reporter program. Sam convinces that he doesn't consider it gambling. For him, it is alternatively a way of making money on very well-tested reality too.

Before the election of the fresh Pope, Domer placed Robert Prevost, later Leon XIV. It was a conclave, or closed vote of cardinals, during which the pope is elected. Quotations gave Provost very small chance, so contracts cost little. If Domer was right, the possible payoff would be high. He yet won $100,000. Before the plant he analysed interviews, statements of cardinals and the arrangement of forces in the Church. He hit better than most of the contestants due to the fact that he analyzed the situation more thoroughly.

There's an average user on the another side. Wall Street diary described the communicative of a Detroit cook who, after a car accident, began looking for additional income on predictive platforms. At first he hit respective bets on the weather and sports results. Then he put everything on 1 contract and lost it.

These stories match the larger picture. akin mechanisms we know from ]]>classic intellectual traps of the investor]]>. According to Wall Street diary analysis, about 70 percent of Polymarket users lose money, and only 0.1 percent of accounts make 67 percent of all profits.

There is another kind of advantage, much harder to regulate. It doesn't come from a better analysis, faster algorithm, or more time. It's about access to information another participants just don't have. That is why Van Dyke's case was so loud, and Reuters reported that Kalshi had marked over 400 transactions as suspicious since the beginning of 2026. Polymarket besides reports an increase in specified cases.

At this point, regulation becomes more hard than in the average stock exchange. In the case of shares, confidential information usually concerns a company, for example results, acquisitions, a large contract or a management decision. With contracts for events, there can be a lot more things. It may be the cognition of an official, politician, soldier, or individual who is simply close to an crucial event.

This is the most crucial paradox. Collective valuation may well foretell the future. Contract prices are more accurate than polls or expert comments. However, this does not mean that the average associate earns from it.

This aptness does not come from the fact that each player predicts the future well. frequently it follows that the best informed and quickest correct the mistakes of others. And that's the difference they make.

It's the same asymmetry we know from options markets or poker with pros. You can sit at the same table, but the playing conditions are not the same for everyone.