Polymarket, Peter Thiel's Palantir Eye 'Surveillance Models' for Sports Prediction Markets

In brief

• Polymarket is creating surveillance systems for sports-focused prediction markets with Palantir, the firm known for its work with the U.S. military.
• The initiative comes as lawmakers have called out suspicious trading activity on markets related to U.S. military efforts, while demanding tougher rules.
• In recent weeks, Kalshi has underscored efforts to self-police traders by publicizing two enforcement actions against traders.

Polymarket signaled on Tuesday that it is planning to work with Palantir on developing systems for surveilling sports-focused prediction markets, a move aimed at bolstering its platform’s integrity by enabling the data-analytics specialist to harness user data. The initiative will center on procedures like transaction monitoring and user screening, using the so-called Vergence AI engine. That tech was developed by Palantir and intelligence systems provider TWG AI through a joint venture created last year, according to a press release. Using Vergance AI, the companies say they will be able to identify potential market manipulation and insider trading nearly instantaneously. The systems are also set to screen bettors to determine whether they are restricted from participating in certain markets.

By opening up its platform to Palantir and TWG AI, Polymarket is trying to prove that it’s capable of self-policing traders’ activity, amid growing calls from U.S. lawmakers to implement tougher rules through bills like the Public Integrity in Financial Prediction Markets Act.  That bill was sponsored earlier this year by Rep. Ritchie Torres (D-NY), not long after a series of suspicious bets around Venezuelan President Nicolás Maduro on Polymarket raised eyebrows. Since then, two Israelis have been charged with using classified information to make bets about the nation’s military operations on Polymarket. Palantir, recognized for its work with intelligence agencies and the U.S. military, was co-founded by billionaire Peter Thiel. A venture firm owned by the entrepreneur, Founders Fund, led a $45 million Series B funding round for Polymarket in 2024.

Decrypt has asked Polymarket whether its efforts in sports could extend to other markets, including those related to armed conflicts, and it will update this article should we hear back. On Tuesday, the firm said that its surveillance systems will create a dedicated environment for managing and escalating cases of suspicious activity. That involves automatically generating documentations that could “support enforcement and regulatory compliance.” “We are excited to be at the center of that transformation,” Palantir co-founder and CEO Alex Karp said in a statement, arguing that the initiative sets a new standard. In recent weeks, rival platform Kalshi has highlighted efforts to police insiders and market manipulators, naming a former video editor for YouTube star MrBeast and a longshot political candidate in California as among its first targets. Meanwhile, Kalshi CEO Tarek Mansour has spotlighted Poirot, a proprietary surveillance system that he said has underpinned 200 investigations. For TWG AI, the tie-up with Polymarket is notable, considering that the firm’s parent company has made investments in sports franchises like the Los Angeles Dodgers and Lakers. Although Kalshi and Polymarket are seeing growth from sports, Kalshi is more exposed to that segment. Last week, 69% of Kalshi wagers focused on sports, compared to 40% on Polymarket, according to a Dune dashboard. Still, sports led for both.