(Bloomberg) — Polymarket is enlisting firms including Palantir Technologies Inc. to help police its sports contracts as prediction markets face intense scrutiny over insider trading.
A platform developed by Palantir and TWG AI will help identify, prevent and report suspicious activity, Polymarket said in a statement Tuesday, confirming an earlier Bloomberg News report. Measures include screening against existing lists of participants already banned from sports betting.
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The monitoring system will be used on a US-regulated venue that Polymarket is building out, according to a person familiar with the matter. The company’s main trading platform is situated offshore and does not accept US-based customers.
“Our partnership with Palantir and TWG AI allows us to apply world-class analytics and monitoring to sports markets,” Shayne Coplan, chief executive officer of Polymarket, said in the statement.
Polymarket and its main rival Kalshi have seen trading volumes explode since last year, driven in large part by sports-related contracts. But questions have arisen over how to monitor and prevent insider trading on everything from elections to geopolitics and sports.
In recent years, professional sports leagues including Major League Baseball and the National Basketball Association have grappled with players allegedly colluding with gamblers, and critics say prediction markets are another venue where people with inside information may seek to profit.
Up to now, Polymarket had been relatively quiet about how it handles insider trading and other forms of market manipulation. But the exchange has been working with IC360, a compliance company that flags unusual betting activity in sports and gaming, people familiar with the matter said.
Kalshi has been more vocal. It recently brought two insider trading cases to its regulator, the Commodity Futures Trading Commission. It also formed a committee that will put out quarterly statistics on flagged trades, investigations and cases referred to the government.
The rival prediction markets came under scrutiny in recent weeks over contracts tied to the conflict in the Middle East. Both platforms handled bets on what would happen in Iran, and after Ayatollah Ali Khamenei was killed, Kalshi moved to reimburse users’ net losses and fees.