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Polymarket is disputing the mission to capture Nicolás Maduro constituted an invasion and said it would only settle a prediction contract if US forces take control of Venezuelan territory.
The prediction market decision has angered gamblers and sparked controversy over a successful bet on the timing of Maduro’s capture that netted a mystery trader a win of more than $400,000. The dispute over the definition of “invasion” highlights one of the controversies faced by the mostly unregulated industry.
Polymarket – which recently received regulatory approval to operate legally in the US – said on its website that it is asking “Would the US invade Venezuela…?” Will solve. The contract expires if the US “launches a military invasion with the intent to establish control over any part of Venezuela” by one of three dates.
It further adds, “The solution source for this market will be a consensus of trusted sources.”
Forecasting platforms like Polymarket do not typically place directional bets in their own markets. Rather, they act as an arbiter that matches long and short positions and adjudicates the outcome of events, collecting fees in the process.
After Maduro was captured and removed from the Caracas compound by US special forces early Saturday, President Donald Trump said the US would dictate the Latin American nation’s policies to be implemented by the remaining regime leaders.
Prices jumped immediately after the raid but fell below 5 percent when the platform decided not to settle the contracts. The platform resolved a similar contract – “US troops in Venezuela…?” – In favor of the “yes” position, hours after the raid on Saturday.
There is currently more than $10.5 million wagered on contracts – most of which is on the January 31 deadline, with the remainder on contracts expiring in March and December. Users who had bet, in some cases, thousands of dollars on a US invasion, have taken to Polymarket’s comments section to express their disappointment.
“Polymarket has descended into complete arbitrariness,” said a user named Skinner. “Words are redefined at will, stripped of any recognized meaning, and facts are conveniently ignored. It is patently absurd for a military incursion, the kidnapping of a head of state, and the takeover of a country not to be classified as an invasion.”
Polymarket did not immediately respond to a request for comment.
Following another incident last year, in which a trader successfully bet on the winner of the Nobel Peace Prize, bets on Maduro’s capture have revived concerns about traders mistaking their information. The timing of the bets on Venezuelan contracts appears to indicate that the trader had advance knowledge of the military action.
The anonymous account, created on December 26, placed several bets on four questions related to US actions in Venezuela in the days before Trump’s operation.
Users bet more than $32,000 that Maduro would be removed from power by the end of January, when “yes” positions were trading at an average of 7 cents – meaning there is a 7 percent chance of him being ousted. When Maduro was flown out of the country on January 3, this market paid 100 cents, giving the trader a profit of $400,000.
The account placed short bets on the presence of US troops in Venezuela – buying at 12 cents and cashing out at 100 – and the submission of the War Powers Act declaration to Congress – buying at around 5 and selling at 51 cents.
The account also traded on the controversial “invasion” market at the right time, placing a $1,000 bet on January 1 when it was priced at 6 cents. The account sold at 18 cents, while speculators were confused whether its terms were met – locking in a 200 percent return before the price dropped to 5 cents.
Congressman Ritchie Torres proposed legislation this week that would prevent insiders “from engaging in covered transactions involving prediction market contracts.”
