Predictions marketplace platform Polymarket has partnered with Palantir and TWG AI to create a monitoring system designed to detect suspicious transactions and manipulation in sports predictions markets, a move that reflects the increasing pressure on the fast-growing sector to establish credibility.
The new system will use Palantir’s data infrastructure and TWG AI’s analytics to monitor trading activity across Polymarket’s marketplaces. The companies say the platform will detect unusual trading patterns, screen participants and generate compliance reports that could be shared with regulators or sports leagues.
Polymarket founder and CEO Shayne Coplan said the goal is to bring “world-class analytics and monitoring to sports markets” while helping leagues and teams maintain trust in the integrity of games.
The effort reflects a broader challenge facing prediction markets as they move from niche crypto experiments to platforms that increasingly influence public debate about elections, economics and sports.
Prediction markets allow users to trade contracts tied to the outcome of real-world events. Because participants put money behind their opinions, proponents argue that markets can efficiently aggregate information and produce accurate forecasts.
But this same structure creates risks.
Prediction markets have been criticized in recent years over the possibility that traders with inside knowledge can profit from events before the public becomes aware of them. Markets emerged around sensitive topics such as political decisions, military actions, labor strikes, and political pardons, raising questions about whether participants could trade based on inside information.
Carlos Pereira, general partner at BITKRAFT Ventures, which manages more than $1 billion in investments in gaming, AI and digital assets, said these concerns could become a serious obstacle for the industry if not addressed.
“There has been what appears to be insider trading,” he said. “When you have a new and therefore somewhat fragile market, making the news in a negative way can be dangerous.”
The monitoring system that Polymarket is building resembles the type of monitoring infrastructure used by traditional financial exchanges. According to the company, it will track transactions before and after orders are placed, report coordinated activities, and identify traders who may be barred from participating.
For operators in the prediction market, the issue is partly regulatory. Formal insider trading rules for these markets remain unclear in many jurisdictions, particularly in the United States, where regulators are still debating how to classify them.
Efforts to strengthen oversight could help the industry demonstrate that it can police itself.
In the absence of these safeguards, Pereira said regulators may feel compelled to intervene more aggressively.
“If markets don’t show they are trying to deal with insider trading,” he said, “the chances of regulation becoming stricter and growth slowing would be much higher.”
