Polymarket Certifies Betting Markets on Arrests and Pandemics

The Polymarket platform has legalized new markets on arrests and pandemics. Self-certification documents submitted on Tuesday confirm that the process is reliable, as clarified during hearings in Congress. An arrest act will be considered qualified if the subject comes under physical control within jurisdiction and one of the following conditions is met: they are criminally charged, arrested under a warrant, or brought to a police station.

Conditions for Arrest on Polymarket

Polymarket defines conditions for a participant as an "arrest" if specific requirements are met. A participant must be taken into custody for criminal offenses or in connection with judicial proceedings. For instance, being brought to a police station is associated with a lawful arrest, but merely being charged without being taken into custody is not considered a winning bet.

International markets for the arrest of Benjamin Netanyahu, Barack Obama, and blogger Reckless Ben are already available. In the new market "Who Will Be Arrested in 2027," bets totaling over $200,000 have been placed.

Regulation and Arrests

The U.S. Commodity Futures Trading Commission (CFTC) regulates such markets under the Commodity Exchange Act. Although arrest markets may be accepted, the rules still prohibit betting on illegal activities gambling markets. As the CFTC explains, if a contract is based on a crime, such as murder, it remains illegal. However, if the subject is a lawful act, such as Bernard Madoff's guilty plea for securities fraud, then it is acceptable.

CFTC Certification Process

During Congressional hearings, the reliability of the self-certification process for new exchanges like Polymarket was discussed. While some critics, such as Chris Sykes from the American Gaming Association, view the process as "unquestioned," former CFTC General Counsel Carl Kennedy emphasizes that it is collaborative and iterative. The Commission often discusses new products before formal certification.

"Self-certification has long been part of a more extended dialogue between exchanges and Commission staff," Kennedy notes.

Future Actions by Polymarket

The certification for pandemic markets has also received approval, allowing Polymarket to transfer international contracts, such as those on the hantavirus, to its services in the U.S. However, critics argue that these markets may lead to insider trading and manipulations with negative consequences.

Lawmakers express concerns about the potential for markets related to military actions due to the risk of creating improper incentives, and similar accusations may be directed at arrest and pandemic markets in the future.