By Alexander Osipovich
Compiled by: Luffy, Foresight News
The assassination of Trump, which shocked the world, plunged the American political arena into chaos and also allowed some adventurous traders to make a fortune.
Minutes after the shooting, Ryan, a 20-year-old Canadian college student, began trading on Polymarket, a prediction market that has attracted a lot of interest because of its connection to the U.S. presidential election.
Ryan believed the shooting would draw voters’ sympathy toward Trump. Before the shooting, Polymarket gave Trump about a 60% chance of winning. On Saturday, when a photo of Trump bleeding and raising his fist circulated widely on the Internet, his chances of winning rose to 70%. That night, Ryan bought thousands of contracts tied to Trump’s victory and then sold them less than an hour later for a profit of about $700.
Polymarket, a four-year-old startup that offers bets on politics, sports, pop culture and just about everything else, hit a record high of $112 million in June and has already surpassed its June total so far this month. Volumes on Polymarket surged after the June 27 presidential debate, where President Biden gave a poor performance and fueled speculation that he would drop out of the race.
Supporters say Polymarket offers a window into the real-time dynamics of the election that can complement polls and expert opinions. This week, the company announced that Nate Silver, the founder of FiveThirtyEight and a master of election forecasting, will join its advisory board. Polymarket’s investors include Founders Fund, a Silicon Valley venture capital firm founded by billionaire Peter Thiel, and some prominent cryptocurrency figures.
Critics worry that election betting could distort voter motivation and encourage election manipulation. Polymarket’s rise comes as the U.S. Commodity Futures Trading Commission (CFTC) seeks to ban derivatives tied to election results after it blocked plans by prediction market Kalshi to launch a campaign betting product. New York-based Polymarket is barred from trading by Americans under a 2022 settlement with the CFTC.
“We are at an all-time low in this country in terms of public trust and confidence in elections,” said Dennis Kelleher, president of Better Markets, a group that advocates for tighter financial regulation and supports the CFTC’s stance on election betting. He added that betting on the election is adding fuel to the fire.
Candidate winning probability on Polymarket
At Polymarket, contracts are tied to yes-or-no questions, like whether Biden will drop out of the presidential race. Each trader can buy a “yes” or “no” contract for prices ranging from $0 to $1. When the question is finally resolved, the person holding the contract gets $1 if they guessed right and nothing if they guessed wrong. Until then, prices reflect the market’s collective wisdom about the likelihood of an outcome. For example, after Rep. Adam Schiff (D-Calif.) called for the president to step down, a “yes” contract for Biden to drop out was priced at 50 cents, meaning Polymarket traders saw a 50% chance that Biden would drop out.
Traders looking to bet on the outcome of the November election can choose not only Trump and Biden, but also Vice President Kamala Harris and other longshot candidates. On Wednesday, Trump led with 68% of the vote, followed by Biden at 14% and Harris at 12%, with Michelle Obama and Robert F. Kennedy Jr. both in the single digits.
Ryan started trading on Polymarket in 2021 when he made a small bet on the release date of Kanye West's last album. He has since become an extremely active trader, spending most of this summer on Polymarket. The Polymarket website shows that he currently trades under the username fhantombets and has accumulated profits of more than $150,000.
Polymarket Monthly Trading Volume
“What I like about Polymarket is that each market requires you to quickly become an expert in your field, and learn new things every day, from foreign election formats to Billboard music chart calculations,” he said. “In three years, I have become an expert on hurricanes, submarines, and Pakistani politics, as well as a lot of other things.”
Villu Veedla, a 33-year-old Estonian, likes to go against the grain of traders at Polymarket. In early July, he thought they were overreacting to the debate because Polymarket was showing a 60% to 80% chance that Biden would drop out.
Veedla, a professional gambler who also bets on the election on the well-known British gambling website Betfair, said: "It is completely out of character for him (Biden) to give up easily after a setback in the debate."
Veedla bought contracts tied to Biden continuing to run. In the following days, as Biden resisted pressure to drop out, Veedla sold those contracts for more than $1,000. He bought similar contracts after Biden held a rally in Michigan last week. The next day, when the assassination of Trump caused Polymarket to predict a lower probability of Biden dropping out, Veedla made another profit of about $2,800.
Veedla, a former concert producer, began his gambling career by betting on the Eurovision Song Contest, the annual competition where viewers vote for their favorite singer. It seemed only natural that Veedla would then become a big-money political gambler.
One of his big profits in 2020 was also related to Biden. At that time, Veedla bet on Biden's victory in the Democratic primary market of the US presidential election on the Betfair website and won more than 200,000 pounds (about 260,000 US dollars).
Veedla said he is politically neutral, which he believes gives him an edge over other traders at Polymarket, who he feels lean toward the right.
“There are a lot of crypto enthusiasts on Polymarket, and most of them support Trump,” Veedla said.