Polymarket under scrutiny in France after trader made $50M on Trump’s win

• A French Trader “Théo” made nearly $50M betting on Trump using the “neighbour polling” method on Polymarket.
• Théo’s private polls and unconventional data use raise transparency concerns.
• French regulator ANJ is investigating Polymarket’s compliance with gambling laws.

The crypto betting platform Polymarket is facing potential regulatory action in France after an anonymous trader, known as “Théo” or the “Trump Whale,” made headlines by netting nearly $50 million wagering on Donald Trump’s victory in the US presidential election.

Théo’s remarkable success has raised questions about prediction market methodologies, data reliability, and the transparency of such platforms.

How Théo made approx. $50M wagering on the US presidential election

Théo, a former bank trader from France, used four anonymous Polymarket accounts to place more than $30 million in bets on Trump winning the popular vote. His strategy, as disclosed in an interview with The Wall Street Journal, revolved around what he termed the “neighbour polling” method.

Unlike traditional polling that directly asks individuals who they would vote for, this technique asks respondents who they believe their neighbours support. This approach can reveal hidden preferences, especially when voters may be reluctant to disclose their true choices.

Publicly released neighbour polls conducted in September, which Théo cited, showed that support for Vice President Kamala Harris was significantly lower when respondents were asked about their neighbours’ preferences compared to direct questioning.

Théo viewed this as an indication that conventional polling underestimated Trump’s support, leading him to make a high-risk bet when Polymarket odds suggested only a 40% chance of Trump winning the popular vote.

To bolster his confidence, Théo commissioned private surveys with a major pollster, which reportedly yielded “mind-blowing” results favouring Trump. However, these findings were kept private due to a confidentiality agreement, fueling speculation about the accuracy and impact of such data on prediction markets.

Autorité Nationale des Jeux (ANJ) investigating Polymarket

The success of Théo’s wager has drawn increased attention to Polymarket’s role in election betting. French authorities, particularly the Autorité Nationale des Jeux (ANJ), are reportedly scrutinizing the platform’s compliance with local gambling laws.

Although Polymarket operates from the US, it only permits non-US users to participate following a 2022 settlement with the Commodity Futures Trading Commission (CFTC). The ease with which VPNs can bypass geographic restrictions adds to the regulatory challenge.

Experts are divided on the efficacy of neighbour polling. While the method has sometimes outperformed conventional surveys, studies indicate that it can also lead to misleading predictions, especially when the public lacks sufficient context or understanding.

Théo’s story exemplifies how unconventional strategies and private insights can disrupt markets, yet underscores the need for transparency and regulation as the landscape of prediction markets evolves.