Most Polymarket Users Lose Money, While Top 1% Claim 76.5% of Gains, Study Finds (msn.com) 88
In Polymarket's prediction market, "most people end up losing money," reports the Washington Post — typically a few bucks.
"Since Polymarket launched in 2022, a few thousand people have lost the bulk of the money... and an even smaller group — .05 percent of users — has gone home with most of the overall profits, according to a new analysis from finance researcher Pat Akey and colleagues." A lot of users aren't that good at predicting the future. They're losing money at roughly the same rate as online gamblers betting on sports and other real-life events at traditional sportsbooks, according to the U.K. gambling regulator's analysis of 2024 data. On Polymarket, the odds of making a profit are slightly higher on weather and tech markets — and a little lower on sports...
On Polymarket, just 1,200 people took more than half the profits — $591 million, or more than $100,000 each. ["The top 1% of users capture 76.5% of all trading gains," the researchers write.] When you dabble in prediction markets, you're competing against these sophisticated players who consistently win. Most of those 1,200 big winners didn't place just a few smart bets. They appear to be pros making thousands of trades, mostly in the past year and a half, that were probably automated. One user made $3 million since January on more than a million trades about the Oscars, according to TRM Labs...
The most profitable participants are also just good at picking what to bet on, Akey found, winning so often it was statistically unlikely to be dumb luck. They had some sort of edge — expertise, deep research or, perhaps, inside knowledge.
"Our results suggest that the informational benefits of prediction markets come at a cost to unsophisticated participants," the researchers conclude.
"Since Polymarket launched in 2022, a few thousand people have lost the bulk of the money... and an even smaller group — .05 percent of users — has gone home with most of the overall profits, according to a new analysis from finance researcher Pat Akey and colleagues." A lot of users aren't that good at predicting the future. They're losing money at roughly the same rate as online gamblers betting on sports and other real-life events at traditional sportsbooks, according to the U.K. gambling regulator's analysis of 2024 data. On Polymarket, the odds of making a profit are slightly higher on weather and tech markets — and a little lower on sports...
On Polymarket, just 1,200 people took more than half the profits — $591 million, or more than $100,000 each. ["The top 1% of users capture 76.5% of all trading gains," the researchers write.] When you dabble in prediction markets, you're competing against these sophisticated players who consistently win. Most of those 1,200 big winners didn't place just a few smart bets. They appear to be pros making thousands of trades, mostly in the past year and a half, that were probably automated. One user made $3 million since January on more than a million trades about the Oscars, according to TRM Labs...
The most profitable participants are also just good at picking what to bet on, Akey found, winning so often it was statistically unlikely to be dumb luck. They had some sort of edge — expertise, deep research or, perhaps, inside knowledge.
"Our results suggest that the informational benefits of prediction markets come at a cost to unsophisticated participants," the researchers conclude.
The fact that anyone is getting any gains (Score:5, Insightful)
Re:The fact that anyone is getting any gains (Score:5, Insightful)
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Now there's a direct and no fuss way for our leadership to take money out of our pockets.
An easy way to avoid this is to just -- not bet in the "prediction markets". This isn't like the stock market where your 401k is tied up in it, it's a literal casino with no rules. Very very easy to avoid.
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Re: The fact that anyone is getting any gains (Score:1)
How is this any different from the outcome at local horse race tracks that offer gambling?
Re: The fact that anyone is getting any gains (Score:2)
You are not allowed to interfere with the horses. That is whats different
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How is this any different from the outcome at local horse race tracks that offer gambling?
My gawd, this is like how's shitcoins different than the stock market.
It's like the worst of the worst old school racetrack hustling.
Look, I’m in a jam here. My ex-wife’s boyfriend is outside double-parked with my kid and if I miss this party again I’m dead. I got this ticket before the steam hit. Beautiful number. Absolute robbery at this price. Honestly I shouldn’t even be offering it. ... But you don't even have to try that hard, you can just whisper rumors about the horse being o
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Insider trading, but with the fun twist of looting not the stock market, but the general populace. Now there's a direct and no fuss way for our leadership to take money out of our pockets.
What do you mean loot the stock market, it's not a pool of money you fish around in, there are people like you and I on both sides of trades. When you profit off the stock market, that money doesn't come from some company, it comes from whoever bought the shares you sold, which can be another retail investor exactly like you. Every time you get out at just the right time, some ... general population.. dimwit FOMO bought that. They're called retail traders, and there's practically no barrier to signing up fo
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Insider trading, but with the fun twist of looting not the stock market, but the general populace. Now there's a direct and no fuss way for our leadership to take money out of our pockets.
Insider trading without all the large institutional investors or otherwise rich people. It's those large or powerful investors that mostly keep the insider trading in check. Otherwise, the stock market would be just like Polymarket and Kalshi.
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If the rates are similar to other forms of gambling than the majority wouldn't be due to insider information. Edge cases will be, but unless you think they have inside information about the weather, the rates between Polymarket and regular gambling wins are relatively consistent as detailed in the article.
Re:The fact that anyone is getting any gains (Score:5, Insightful)
It's just up to various forms of insider information. Not trading because this isn't trades this is gambling.
You make it sound like the rich getting richer using insider information is a bad thing? You must not be among the fraction of 1%.
Re:The fact that anyone is getting any gains (Score:4, Insightful)
Worse than the stock market. At least in the stock market you can buy and hold and ride the market up.
Re:The fact that anyone is getting any gains (Score:4, Insightful)
The comparison with casino games is not appropriate. The casino merely biases the outcome to give players a less than even chance of winning. That chance is low, but guaranteed to be nonzero, and the gamblers are able to agree to the conditions of the game in full.
Insider trading causes the "gambler" to be deliberately misled into thinking a particular game is being played when it is not.
Re: The fact that anyone is getting any gains (Score:1)
It's not gambling when a participant can act on insider information.It's a rigged system.
Are you under the impression that horse races aren't, occasionally, rigged? That the 'insiders' bet based on insights they get from owners, trainers, stable hands, and jockeys?
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it's more like carnival games - completely rigged, and not really fun for anyone who realizes that it's rigged
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It's just up to various forms of insider information. Not trading because this isn't trades this is gambling.
It's literally trading, the gains are someone else's loses, that's simple. It is worse than gambling, _because_ it's a trading platform. You can buy low odds, pump it up, then take your profits before the contract is resolved. It's the worst of the stock market with the worst of gambling.
Also 94% of the bets (Score:5, Insightful)
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Re:Also 94% of the bets (Score:4, Interesting)
Match fixing is a thing but in the major sports, the TV revenue is larger than betting revenue by several orders of magnitude.
Very true, but betting on games makes people more likely to watch tehm, driving viewership and TV revenue. Major sports may decry the impact of gambling and run all the Addicted? Call ... ads hey want, but the reality is gambling helps driver viewership which brings in money so you can do the math...
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Why the hell did we allow this to become legal? Sports betting has never been good for the game or the audience.
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Both Rozier and former NBA player and coach Damon Jones have been charged in federal court with sharing inside information on injuries with bettors, who were able to profit by betting proposition unders.
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It's a question of scale. Where do you find more insider trading, in a heavily regulated sports betting system, or on an open unregulated trading platform where people can make bets on literally anything?
In sports betting insider trading is rare enough that I bet you had to look up a case of it to make your point. On the flip side on Polymarket it is common enough that I can mention multiple instances of insider trading (and also suspected instances) from the past 2 months alone.
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Of course they are. People who know that the team bus got in late last night, Joe stubbed his toe, whatever. Or just "insiders" who actually know something about the sport and aren't just betting on their favourite team to win the way they do every weekend.
Most betting on things that aren't completely random is going to have a strong element of fleecing the casuals. The actual insider betting (and trading) is a gradient with a somewhat arbitrary threshold too.
Yeah they are (Score:1)
The reason you're having a hard time with it is that none of this is really insider information in the st
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The silly stuff gets all the press but in reality it's all just a sports betting platform.
No it's not. Sports betting is heavily regulated.
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" Sports betting is heavily regulated."
Indeed, players not allow to bet, their moms have to.
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Right, so if they can pretend that they aren't really sports gambling they have quite the competitive advantage...
Dear Regulator, It's not gambling, It's complex financial instrument called hedging. Pinky swear, cross my heart, and hope to profit on insider trading!
reflects the real world (Score:3)
Reflecting the real world. The 1% use insider information to generate more wealth by titling the odds in their favor. Hmmm
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by titling the odds in their favor
Last time I was titling the odds, the only "wealth" I generated was a prescription for acyclovir :|
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sounds like an inside-her information situation
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Insider information or insider power. Both work just as well.
Insider information is when you exploit information that isn't public. Insider power is when you influence the outcome to your favor.
Many early sports bets used insider power - the player would get a cut of the profits if they tilted the game like faking an injury.
Anyways, news like this is good. If people know these markets are rigged against them, they'd likely avoid using these platforms. It's why regulations exist - the SEC doesn't go after in
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Anyways, news like this is good. If people know these markets are rigged against them, they'd likely avoid using these platforms. It's why regulations exist - the SEC doesn't go after insider trading because it wants a fair market, it does it because a fair market means more people will participate.
No, they won't. The small percentage of people losing the most money are credulous morons and gambling addicts who think they have "a system" or some other kind of edge and just need one more to hit the big one.
Polymarket is old news, Calamitrade is taking over (Score:2)
76.5% (Score:2)
the 1% with "special information" (Score:3, Informative)
fools (Score:2)
What's the appeal on losing money to those with inside information?
the real company name should be (Score:4, Funny)
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And they could open a social networking platform too. Maybe it could be called "truthsocial.com".
Re:the real company name should be (Score:5, Insightful)
"insidertrading.com"
Right now, it's pretty likely the following would also cover this:
"whitehouse.gov/insidertrading"
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"Informational benefits" (Score:3)
When people start treating these casinos as a source of predictive information is when they'll become the most dangerous:
https://insights.som.yale.edu/... [yale.edu]
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General public and media absolutely already started doing this for some time.
Poker (Score:4, Insightful)
It's the new 1% (Score:2)
Well, it's probably just the same old 1%.
\o/ (Score:1)
Insider traders do better?
1% = criminals (Score:2)
1% of any group are criminals.
If 1% are making more than 50% of money, then the obvious answer is that they are enganged in criminal activities.
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Compounds? Yes! .8%, but still we should expect abou
80% of that 80% is caused by 20% of the 20% - so, 64% is caused by 4%. That's squaring the rule. And what happens when you cube it? Well, you find that ~50% of effects are caused by ~1%. I think it's actually 51%+change and
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Re: 1% = criminals (Score:2)
I find it so crazy that the natural numbers these laws come up with are evenly divisible human friendly numbers.
The fact this is not the 17:83 rule is amazing!
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The Poker Table Rule (Score:1)
If, after 15 minutes at the table, you don't know who the sucker is ... it's you.
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Suckers (Score:2)
"A lot of users aren't that good at predicting the future" is just another way of saying the vast majority of the polymarket bettors are suckers. The old adage of "If you don't know who the sucker is, then you're the sucker" holds true for polymarkets. If you don't have insider information, especially illegal insider information, then you're just donating your money to those who do.
Sometimes, it's maths (Score:4, Interesting)
But the biggest wins can only be insider trading.
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It's important to remember this is zero-sum gambling, the entire market can't bet on the same outcome.
It is not zero sum. The usual suspects are market making as well at the platforms themselves. This is a critically important fact to know if you're trying to reason about how this all works.
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The usual moaners (Score:5, Funny)
And this is bad because? (Score:2)
I like your joke and my Subject is the one I was looking for in the discussion. Just more "tools for fools" to help the richer get more obscenely rich.
I'll add the horse race joke, since I'm pretty sure it also applies here, even though I'm basically too contemptuous of all gambling to spend time digging out the details for the polymarkets. However I'm pretty sure this is one of the scams where the house takes profits off the top. Therefore there are two cases for the gamblers. They might believe the game i
Sucker monetization (Score:2)
Shocked (Score:2)
I'm shocked, shocked to find that manipulation is going on here in this gambling establishment.
So they meant Trump insiders making bets ! (Score:3)
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In other news, most gamblers are suckers (Score:2)
Stacked against you (Score:1)
Yea, I tried my hand at it, using analysis of the big "whales" but the system is definitely stacked against you. Some people have used it to arbitrage events like the weather, but there are diminishing returns there. The winner here is Polymarket and that tiny sliver of big whales betting on inside knowledge.
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lose (Score:3)
I have a theory (Score:2)
Sounds about right (Score:2)
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Shocker, it's a scam. (Score:2)
Gambling gains come at a cost ... (Score:2)
to unsophisticated players? Gosh I never would have guessed that. As I recall, the old saying is, if you don't know who the sucker is sitting at the table, it's you.
Opted Out (Score:2)
"A strange game. The only winning move is not to play." -- Joshua / WOPR
spread (Score:2)
"They appear to be pros making thousands of trades, mostly in the past year and a half, that were probably automated"
Bots are taking everyone's money? Shocking! The fact that Don Jr. is on the board means none of Trump's cronies running the bots will get banned. Heck I don't see Polymarket banning anyone as long as they're making all that money.