Online fury as betting market Polymarket denies Venezuela was invaded

By Brett Arends

If this isn't an invasion, what is?

Donald Trump Jr.'s private investment company bought a stake in Polymarket last year, and he joined the company's advisory board.

Who says the U.S. government didn't just invade Venezuela to capture its president and first lady?

A global betting market with close ties to the Trump family, that's who.

Customers of Polymarket are crying foul after the world's biggest prediction market has refused to pay out on bets that the U.S. would "invade" Venezuela, claiming that the events over the weekend don't count.

"Then what the f- would be an invasion?" asked one anonymous client in a post on the Polymarket website, calling the company "Polyscam."

"Polymarket has descended into sheer arbitrariness," said another. "Words are redefined at will, detached from any recognized 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."

"You wanna be f-ing kidding me," wrote another.

"So it's not an invasion because they did it quickly and not many people died?" asked another. (The New York Times, citing a Venezuelan official, has reported a death toll of 80 in the raid.)

The comments section turned to heavy sarcasm, with several gamblers asking whether the U.S. somehow used a "teleportation device" to extract Venezuela's President Nicolás Maduro and first lady Cilia Flores without actually invading the country.

It wouldn't normally be news that gamblers seemingly on the wrong side of a bet are complaining. But in this case the story is the context. Gamblers aren't the only ones baffled to learn that when the U.S. government sends its military into Venezuela, captures a president and his spouse, bodily transports them to the U.S. and then announces that the U.S. will, according to President Donald Trump, "run" the country forthwith, that doesn't - according to Polymarket, anyway - count as an "invasion."

The mind boggles.

"This market refers to U.S. military operations intended to establish control," the company explains on its site. "President Trump's statement that they will 'run' Venezuela while referencing ongoing talks with the Venezuelan government does not alone qualify the snatch-and-extract mission to capture Maduro as an invasion."

MarketWatch reached out to Polymarket for an explanation, but it didn't respond. We also emailed the founder and CEO, 28-year-old billionaire crypto bro Shayne Coplan, directly. He didn't respond, either.

You'd think a growing company like Polymarket would want to clarify matters, no?

Apparently not.

Polymarket is a peer-to-peer bookmaker. It's not "the house," so it's not formally taking either side in a bet. It's created a platform on which individuals bet against each other. So if it makes a ruling in a bet, even a wild one as appears to have occurred here, the company could argue that it doesn't benefit either way.

But that does raise the question of who is betting, and why the company is deciding one way rather than another. Several clients raised the question of whether this bet was being redefined to benefit "whales," or big-money gamblers, at the expense of the small fry.

There's no reason to think so. Then again, there's no reason to think not. We just don't know.

In the U.S., the betting site is "regulated" by the Commodity Futures Trading Commission. I reached out to the commission. It didn't respond, either.

This is among the many risks when you deal with privately held companies in "decentralized finance" that are lightly regulated, if at all. If something goes wrong, good luck getting through to anyone.

And it's a good lesson for everyone rushing to the red-hot prediction-market scene, especially as Polymarket comes back to the U.S. after having previously been effectively banned. The way the yes-or-no questions are worded can make a huge difference, and the way event outcomes are interpreted can be gray and murky. Buyer, beware.

To be honest, I wouldn't bet on a market like this with counterfeit money, as the late, great poker guru Herbert Yardley used to joke. But if you do, read the fine print twice, or thrice.

What makes this all especially interesting is that Polymarket, a private company based on cryptocurrencies and "decentralized" finance, has close ties to the Trump family.

Donald Trump Jr.'s private investment company bought a stake in the online prediction market last August, and he joined the company's advisory board.

Soon after Trump Jr.'s firm bought into the company, Polymarket got approval from the CFTC to operate in the U.S.

The five commissioners who run the CFTC are appointed ... by the president.

I probably don't need to draw you a diagram.

But if this Trump-allied bookmaker is denying that the U.S. invaded Venezuela when it just invaded Venezuela, what does that mean?

If you feel like you are trapped in a Quentin Tarantino movie loosely based on George Orwell's "1984," you may not be alone.

Polymarket offers a wide variety of bets on U.S. conquests of Venezuela. A trader has raised eyebrows after making a quick killing on a bet that Maduro would shortly be removed from office. The obvious suspicion that someone had inside information of the U.S. action has caused U.S. Rep. Ritchie Torres, a New York Democrat, to propose legislation that would make any such trading by government officials illegal.

But the markets specifying invasion are the ones where there's a problem. According to the betting on Polymarket as of Monday, there was only a 6% chance the U.S. would invade Venezuela before Jan. 31, 14% by the end of March and 22% by the end of the year.

Polymarket is booming. The privately held company was recently valued at $9 billion when Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, bought a stake in October. But it won't help if results are ambiguous and gamblers are left feeling cheated.

I reached out to long-established competitor Predictit.org, which also lets users bet on real-world outcomes. The company replied promptly. "PredictIt offers markets on political, economic and real-world events, but does not list markets involving active war, violence, loss of life or humanitarian crises," it said in a statement. "Our focus is on measurable political processes and government actions rather than real-world harm or conflict."

Or, to put it another way: Among other things, it offers markets on things where there's a clear result.

-Brett Arends

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