FBI goes after Polymarket in election betting probe

The FBI and the Department of Justice have gone after Polymarket, a prediction market platform which has been repeatedly labeled as a "political betting site" by numerous media, and has ended in the public eye, after news surfaced that some $3.2bn had been placed on the recently-concluded US Presidential elections.

The reason behind this operation is the alleged continuous acceptance of U.S. users as clients by Polymarket, allowing people from the United States to place predictions on the outcomes of various events, including the November 5 elections

Did Polymarket break the law or is it suffering political retribution?

Polymarket won its claim to popularity after it successfully predicted that Donald Trump – the 45th US President – would also become the country’s 47th, at a time when conventional polling wisdom said the race was neck-and-neck.

Although the incoming administration has emphatically affirmed its credentials as a cryptocurrency champion, Polymarket is still operating under a political regime of mostly cryptocurrency hawks.

Shayne Coplan, the company’s founder whose New York home was raided, and phone ceased, took to X to criticize the Biden administration specifically, arguing that it was making a "last-ditch effort" to go after companies that he insisted were associated with "political opponents."

"We are deeply committed to being non-partisan, and today is no different, but the incumbents should do some self-reflecting and recognize that taking a more pro-business, pro-startup approach may be what would have changed their fate this election," Coplan said.

However, Polymarket is hardly unfamiliar with the law. Back in 2022, the company settled with the Commodities and Futures Trading Commission to stop offering prediction markets to US users and block them.

The company paid $1.4m at the time, but it may have been emboldened by Kalshi’s win over the regulator that paved the way for what many again said was "political betting."

Kalshi for example maintained that its markets were distinctly not associated with betting markets of any sort. Media reports have insisted in the meantime that Polymarket’s ban of US players, while in place, has been mostly circumnavigated with the use of

Trump’s chumminess to crypto means gladder tidings for Polymarket

The argument that the FBI and the Department of Justice are acting out of retributory spite and have organized a complex multi-agency investigation into Polymarket to fulfil a political agenda falls flat, as Polymarket only started accepting higher volumes of money on election forecast markets nearer November 5.

However, this narrative is already well-established in the media in one way or another. For example, Rupert Murdoch, a Trump-aligned media mogul and businessman, seems to also favor this point of view. The New York Post already said that it had sources who had confirmed that it all boiled down to "political retribution."

Of course, Murdoch’s ownership of the Post is not in any way reflective of the actual publication by the media which was done independently. Polymarket though has been grabbing headlines.

At one point in October, Internet sleuths discovered that a single, most likely French, trader had placed $35m on the President-elect to win, possibly swaying bias in favor of Trump.

In the meantime, Polymarket is also facing pressure in France. However, whatever political woes Polymarket may have with the current administration or any investigative institutions, those may soon be squelched with Trump already picking his team for numerous key posts, including the highly controversial Tulsi Gabbard, who will oversee the intelligence community.

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