Prediction market Polymarket is in the process of hiring an internal market-making team that will trade directly against customers — a shift that could blur the lines between a prediction market and a traditional sportsbook.
The company has recently spoken to traders and sports bettors about building the new desk, according to Bloomberg, citing people familiar with the matter. The move follows a similar step by rival Kalshi, which has defended its own in-house trading team as a way to improve liquidity and the user experience.
In practice, however, hiring external market makers is entirely possible, raising questions about Polymarket’s true motivation. The decision appears focused less on product improvement and more on generating revenue.
“They don’t charge fees. They don’t make money. They want to find a way to monetize,” Harry Crane, a statistics professor at Rutgers University, told CoinDesk.
Crane said Polymarket plans to offer parlays through an RFQ protocol, with the in-house desk pricing and matching those bets.
“These require significant capital to back and also offer a substantial edge for the house if executed correctly,” he said. “I think it’s short-sighted and ultimately a mistake, but time will tell.”
A small revenue stream with outsized risks
Crane also questioned the financial logic behind the strategy.
“Given the huge valuations, it’s not a viable strategy to monetize, if that’s the objective,” he said. “Assuming the trading desk is profitable — which is far from a given — the amount it can profit is a pittance compared to its valuation.”
More importantly, Crane warned, the company can’t afford for the desk to be too profitable.
“The company should not want an in-house trading team to be too profitable, as that will create significant PR problems and possible legal issues,” he said. “Just look at the class-action against Kalshi for doing the same. That lawsuit appears to be 100% frivolous, but the optics and PR are not positive.”
Beyond the legal risks, Crane argued the move undermines Polymarket’s strategic identity. “This diminishes Polymarket’s opportunity to differentiate itself from the competition, and it dedicates resources and focus to something that is definitively not what got the company to this point.”
A shift toward a sportsbook model
This change makes Polymarket resemble a sportsbook, where users effectively trade against the house rather than other bettors. At a sportsbook, in-house traders set prices and build in vigorish — typically giving the operator a 5%–10% edge.
Polymarket’s foray into this territory could create a conflict of interest and unsettle bettors who joined prediction markets precisely because they weren’t sportsbooks. Markets would no longer reflect the collective wisdom of traders but instead the pricing decisions of Polymarket’s internal desk.
It also risks eroding Polymarket’s reputation as a barometer of real-world probabilities. That reputation was a key engine of its rapid growth during the 2024 U.S. election cycle, when news outlets routinely cited Polymarket alongside polling data, boosting its mainstream legitimacy.
Blurring lines and raising questions
Crane said the sportsbook comparison understates the problem.
“Does it blur the line between a prediction market and a traditional sportsbook? Yes, but it’s worse than that,” he said. “At a sportsbook it is well understood that the book is the counterparty, and will use whatever information it can to get the edge over its customers. Exchanges are supposed to be different.”
“But as long as there are in-house or privileged participants on an exchange, there will always be suspicions that they are gaining an unfair advantage,” Crane added, pointing to a recent controversy at NoVig, which voided a number of winning bets because its in-house market maker was the losing counterparty.
The introduction of an internal desk also raises operational and ethical questions reminiscent of the FTX-Alameda dynamic. How much order-flow or deposit-timing data will the desk have access to? Could it trade ahead of customer flows? Or will it simply post liquidity and collect spread, as some exchanges claim?
A risk to brand and trust
While market making may create a new revenue stream, the shift threatens the perceived neutrality and trust that helped Polymarket rise to prominence. The company did not immediately respond to CoinDesk’s request for comment.
Setting aside questions of fairness, Crane believes the strategy is simply misguided.
“It’s a bad business decision that takes a platform that previously felt very new and different and instead makes it look and feel just like everyone else,” he said.
