Polymarket Hiring In-House Team to Trade Against Customers — Here's Why It's a Risk

Core Viewpoint - Polymarket is transitioning to hire an internal market-making team, which may blur the lines between a prediction market and a traditional sportsbook [1] Group 1: Company Strategy - The company is engaging with traders and sports bettors to establish the new market-making desk, following a similar initiative by rival Kalshi [2] - The decision to create an in-house trading team appears to be more focused on revenue generation rather than product improvement, as the company currently does not charge fees or generate profit [3] - Polymarket plans to introduce parlays through a Request for Quote (RFQ) protocol, with the internal desk responsible for pricing and matching bets [3] Group 2: Financial Implications - The financial logic behind the strategy is questioned, as the potential profits from the trading desk may be minimal compared to the company's high valuation [5] - There are concerns that the company should avoid making the trading desk too profitable to prevent public relations and legal issues, referencing a class-action lawsuit against Kalshi [6] Group 3: Market Positioning - The shift towards an in-house trading model aligns Polymarket more closely with a sportsbook, where users trade against the house rather than each other, potentially altering the market dynamics [7] - This transition could create conflicts of interest and may unsettle bettors who prefer prediction markets for their distinct nature, as market prices would reflect the internal desk's decisions rather than collective trader wisdom [8]