Polymarket has partnered with Palantir and TWG AI to build a monitoring system for sports prediction markets, targeting suspicious trading activity and potential manipulation. The move goes straight to a credibility issue for a sector that has been expanding quickly.
According to the companies, the system will combine Palantir’s data infrastructure with analytics from TWG AI to watch trading activity across Polymarket markets. It is designed to detect unusual trading patterns, screen participants, and generate compliance reports that could be shared with regulators or sports leagues.
The system is built to watch trading before and after orders
Polymarket said the setup resembles surveillance infrastructure used by traditional financial exchanges. It will track activity before and after orders are placed, flag coordinated behavior, and identify traders who may be barred from participating. Founder and CEO Shayne Coplan said the aim is to bring “world-class analytics and monitoring to sports markets” while helping leagues and teams maintain confidence in game integrity.
The timing matters. Prediction markets are moving beyond their origins as crypto-native experiments and are increasingly shaping public discussion around elections, economics, and sports. These venues let users trade contracts tied to real-world outcomes, and supporters argue that markets backed by money can aggregate information efficiently and produce accurate forecasts.
Inside information remains a central concern for the sector
That same structure has drawn criticism. Prediction markets have faced repeated questions over whether people with inside knowledge can profit before information becomes public. Contracts have appeared around sensitive subjects such as policy decisions, military actions, labor strikes, and political pardons, prompting concerns that some traders may be acting on privileged information.
Carlos Pereira, a general partner at BITKRAFT Ventures, which manages more than $1 billion across gaming, AI, and digital asset investments, said those issues could become a serious obstacle if they are left unresolved. He said there has been what “seems to be insider trading,” and warned that negative headlines can be dangerous for a market that is still new and somewhat fragile.
Regulatory treatment is still unsettled in the U.S.
For prediction market operators, the pressure is not only reputational. The article notes that formal insider trading rules for these markets remain unclear in many jurisdictions, especially in the U.S., where regulators are still debating how they should be classified. By adding a surveillance and reporting layer now, Polymarket is trying to strengthen compliance controls before the rulebook is fully settled.