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Polymarket is disputing the mission to capture Nicolás Maduro constituted an invasion and said it will only settle a prediction contract if the US military takes control of Venezuelan territory.
The decision by the prediction market has angered gamblers and added to the controversy surrounding a successful wager on the timing of Maduro’s capture that netted more than $400,000 in winnings for a mystery trader. The dispute over the definition of “invade” highlights just one of the controversies faced by the mostly unregulated industry.
Polymarket — which only recently gained regulatory approval to operate legally in the US — says on its website that it will resolve the “Will the US invade Venezuela by . . .?” contract if the US “commences a military offensive intended to establish control over any portion of Venezuela” by one of three dates.
“The resolution source for this market will be a consensus of credible sources,” it adds.
Prediction platforms such as Polymarket do not typically make directional wagers in their own markets. Rather, they act as an intermediary matching long and short positions and adjudicating the outcome of events, collecting a fee in the process.
After Maduro’s capture and extraction from his Caracas compound by US special forces early on Saturday, President Donald Trump said the US would dictate the Latin American nation’s policies to be carried out by leaders of the remaining regime.
Prices on the question spiked shortly after the raid but fell below 5 per cent when the platform chose not to settle the contract. The platform resolved a similar contract — “US forces in Venezuela by . . .?” — in favour of the “yes” position a few hours after the raid on Saturday.
There is currently more than $10.5mn wagered on the contract — the majority on a January 31 deadline, with the remainder on contracts ending in March and December. Users who had in some cases bet tens of thousands of dollars on a US invasion have taken to Polymarket’s comment section to vent their frustration.
“Polymarket has descended into sheer arbitrariness,” said a user called Skinner. “Words are redefined at will, detached from any recognised meaning, and facts are simply ignored. That a military incursion, the kidnapping of a head of state, and the takeover of a country are not classified as an invasion is plainly absurd.”
Polymarket did not immediately respond to a request for comment.
The bet on Maduro’s capture has revived concern about traders unfairly capitalising on their information edge, after another incident last year in which a trader successfully wagered on the winner of the Nobel Peace Prize. The timing of the bets on the Venezuela contracts appeared to indicate the trader had advance knowledge of the military action.
The anonymous account, created on December 26, placed a series of wagers on four questions related to US actions in Venezuela in the days ahead of Trump’s operation.
The user bet more than $32,000 that Maduro would be removed from power by the end of January, when the “yes” position was trading at an average of 7 cents — implying a 7 per cent likelihood of his ousting. This market paid out at 100 cents when Maduro was flown out of the country on January 3, netting the trader a $400,000 profit.
The account made smaller bets on the presence of US forces in Venezuela — buying at 12 cents and redeeming at 100 — and the submission of a War Powers act declaration to Congress — buying at about 5 and selling at 51 cents.
The account also made a well-timed trade on the controversial “invade” market, betting $1,000 on January 1 when it was priced at 6 cents. The account sold at 18 cents while bettors were confused whether its terms were satisfied — locking in a 200 per cent return before the price fell back to 5 cents.
Congress member Ritchie Torres this week proposed legislation that would prohibit insiders “from engaging in covered transactions involving prediction market contracts”.
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