Prediction Market Polymarket is recruiting an in-house market creation team who will trade directly with customers – a move that could blur the lines between a prediction market and a traditional bookmaker.
The company recently spoke with traders and sports bettors about building the new office, according to Bloombergciting people familiar with the matter. The move follows a similar move by rival Kalshi, which championed its own in-house trading team as a way to improve liquidity and user experience.
In practice, however, hiring external market makers is entirely possible, raising questions about Polymarket’s true motivation. The move seems less focused on improving products and more on generating revenue.
“They don’t charge fees. They don’t make money. They want to find a way to monetize,” Harry Crane, a statistics professor at Rutgers University, told CoinDesk.
Crane said Polymarket plans to offer bets via an RFQ protocol, with internal desk pricing and matching of those bets.
“These projects require significant capital and also provide a substantial benefit to the home if done correctly,” he said. “I think it’s short-sighted and ultimately wrong, but time will tell.”
A small source of income with outsized risks
Crane also questioned the financial logic behind the strategy.
“Given the huge valuations, this is not a viable monetization strategy, if that is the goal,” he said. “Assuming that the trading desk is profitable – which is far from certain – the amount from which it can benefit is insignificant compared to its valuation.”
More importantly, Crane warns, the company can’t afford for the office to be Also profitable.
“The company should not want an in-house sales team to be too cost-effective, as this would create significant public relations issues and possible legal issues,” he said. “Just look at the class action lawsuit against Kalshi for doing the same. This lawsuit appears to be 100% frivolous, but the optics and PR are not positive.”
Beyond the legal risks, Crane argued that the move undermined Polymarket’s strategic identity. “It diminishes Polymarket’s opportunity to differentiate itself from the competition, and it devotes resources and focus to something that is definitely not what got the company to this point.”
A shift towards a sports betting model
This change makes Polymarket look like a bookmaker, where users trade effectively against the house rather than other punters. At a sportsbook, inside traders set prices and build aggressively, which typically gives the operator a 5-10% advantage.
Polymarket’s foray into this territory could create a conflict of interest and destabilize punters who have joined prediction markets precisely because they were not sports betting. Markets would no longer reflect the collective wisdom of traders but rather the pricing decisions of Polymarket’s internal office.
It also risks eroding Polymarket’s reputation as a barometer of real-world probabilities. This reputation was a key driver of its rapid growth during the 2024 US election cycle, when media outlets regularly cited Polymarket alongside polling data, reinforcing its mainstream legitimacy.
Blur the lines and raise questions
Crane said the sports betting comparison underestimates the problem.
“Does this blur the line between a prediction market and a traditional sports betting site? Yes, but it’s worse than that,” he said. “In a bookmaker it is well understood that the book is the counterparty and they will use whatever information they can to gain an advantage over their customers. Trading is supposed to be different.”
“But as long as there are internal or privileged participants on an exchange, there will always be suspicions that they are gaining an unfair advantage,” Crane added, pointing to a recent controversy within NoVig, which reversed a number of winning bets because its internal market maker was the losing counterparty.
The establishment of an internal desk also raises operational and ethical questions reminiscent of the FTX-Alameda dynamic. How much data on order flow or filing timing will the office have access to? Could he negotiate before customer flows? Or will it simply post liquidity and collect spreads, as some exchanges claim?
A risk for the brand and trust
While market making may create a new revenue stream, this change threatens the perceived neutrality and trust that helped Polymarket rise to prominence. The company did not immediately respond to CoinDesk’s request for comment.
Leaving aside questions of fairness, Crane believes the strategy is simply wrong.
“It’s a bad business decision to take a platform that previously seemed very new and different and instead make it look like everyone else’s,” he said.
