Having a flutter on who will win the US presidential election is pretty harmless — and political bets have quickly become Polymarket’s bread and butter.
There are many other topics where users can put their money where their mouths are too, from who will win the Ballon d’Or to the Federal Reserve’s decision on interest rates next month.
But as demand for crypto-powered prediction markets continues to rise, an uncomfortable question has started to emerge: should certain issues be off limits?
This moral quandary was raised by @legendarygainz_ on X, who shared a screenshot showing a full page of wagers related to the worsening conflict between Israel and Hezbollah.
Legendary’s argument basically boiled down to this: it’s slightly uncomfortable to see this war treated as entertainment — and especially distasteful for bettors to profit off the misery of others by accurately predicting what comes next.
A cursory glance at the Middle East section of Polymarket illustrates the problem, with hundreds of thousands of dollars gambled on how Israel may retaliate after Iran fired an estimated 200 missiles toward the country last week.
At the time of writing, there’s said to be a 48% chance that the IDF will launch a military response against Iran by Friday — rising to an 88% likelihood at some point this month.
It’s easy to see how innocent civilians caught up in the middle of this conflict would find this distressing, especially considering the many lives lost so far.
Legendary, who hosts The Modern Market Show, told Cryptonews that he had a particular issue with how prediction markets on the Middle East had been presented, saying:
“In my opinion, it’s one thing to have exposure to military companies via the S&P 500 or direct stock investments — but another to bet on invasion dates or captured cities.”
After the X post expressing his discomfort led to a heated discussion, some had argued that Polymarket bets were no different to gaining exposure to defense stocks.
While Legendary doesn’t believe that Polymarket should remove its Middle East section altogether, he does think the company should make some subtle changes.
“The presentation should be in a different context.”
Those who click into individual bets related to Israel, Hezbollah, Iran or Gaza are currently greeted by a prominent disclaimer at the top of the page, where Polymarket explains its rationale for offering such bets.
The company argues these markets create “accurate, unbiased forecasts” that are “invaluable” to those affected — loftily claiming they offer answers that TV news and social media can’t. Polymarket went on to stress that it’s providing this service at a loss and takes no fees.
Legendary believes this disclaimer is a step in the right direction, and should also appear at the top of themed pages like Iran, Lebanon, and Middle East that group different bets together.
He also isn’t convinced by the narrative that betting markets offer the world information that cannot be found through media outlets.
“If anything, betting markets aggregate social media and news sites. The people who have insider information on those conflicts (such as military or intelligence agencies) are hopefully not betting on Polymarket. If anyone does have insider information and bets, then it could actually reveal plans to opposing sides.”
In Polymarket’s Defense
Among those who argue that a Middle East section should continue to exist on Polymarket is Ethereum co-founder Vitalik Buterin. He believes such bets are a powerful counterweight against disinformation, and explained why.
“There’s all kinds of people (incl elites) on twitter and the internet making harmful and inaccurate predictions about conflicts, and being able to go and see if people with actual skin in the game think that something has a 2% chance or a 50% chance is a valuable feature that can help keep people sane.”
Buterin did concede that there can be a slippery slope — and a line must be drawn at some point, such as markets speculating on whether high-profile individuals will be assassinated.
“To me the dividing line is: is the market acting as a primary *incentive* for people to do bad things so they can insider trade on them?”
Given the breathlessness that often surrounds breaking news events on X, Buterin has a point. But it’s worth remembering that Polymarket itself could also be susceptible to manipulation — especially on bets with particularly thin trading volumes. A big wager on a small market could see odds suddenly change drastically, and mislead people on the likelihood of an event happening.
Another Polymarket supporter, @SpeculatorArt on X, argued that there can be upsides to bets that some people would regard as morally wrong.
“Let’s say Polymarket had a market around Hurricane Helene and how destructive it would be. You could argue it’s morally wrong to have a market around that. I could argue that the market allowed people who can’t get home insurance to bet on the market and offset the risk of damage to their homes.”
It seems incredibly unlikely that everyday consumers would take out such bets if their properties were uninsurable — and given this is a form of gambling, such a practice could end up being exceedingly harmful, causing even more financial harm.
Every successful company has growing pains, and occasionally has to undergo a course correction after courting controversy.
While Polymarket has taken some steps to ensure that it can’t be accused of profiting from the deeping conflict in the Middle East, only time will tell if this is enough.
The post Has Polymarket Gone Too Far? appeared first on Cryptonews.
