Polymarket decided to fix its marketing practices. The timing has nothing to do with the CFTC investigation into those exact practices. Pure coincidence.
The company expects prediction markets to boom this fall. Makes sense. Nothing gets retail traders more excited than putting real money on outcomes they understand less than a coin flip. At least with a coin flip you've got a fifty-fifty shot. With prediction markets you're betting against people who've actually read the terms of service.
The CFTC is looking into promotional practices. That's regulatory speak for "we noticed you were doing something and we'd like you to stop." Polymarket noticed this noticing and thought maybe now would be a good time to get the house in order. Proactive compliance. Very responsible.
Boom times are coming though. Fall 2024 will bring an explosion of people confidently wagering on things they learned about from a podcast they half-listened to while doing laundry. The platform wants to be ready. Can't have messy marketing when you're trying to scale up the operation of separating fools from their money in a technically legal way.
Here's what getting the house in order means: changing enough surface-level stuff that when the regulators come back you can point to a PDF and say "we addressed your concerns." The concerns get addressed. The business model stays exactly the same. Everyone shakes hands.
The prediction market boom will arrive right on schedule. Thousands of new users will sign up to prove they're smarter than the consensus. They will not be smarter than the consensus. They will lose money with the confidence of someone who once correctly predicted a Super Bowl winner and has been dining out on that story ever since.
Polymarket saw the writing on the wall and decided walls look better without writing on them.
Photo by Declan Sun on Unsplash
Leave a Comment