Researchers from the London Business School and Yale University analyzed Polymarket transactions from 2023 to 2025.
The study covered 1.72 million accounts, 210,322 markets, and approximately $13.76 billion in trading volume.
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Researchers from the London Business School and Yale University have concluded that the platform’s forecasting accuracy comes from an “informed minority,” not the collective intelligence of participants.
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Inequality on Polymarket: 3% Take 30% of Profits
Only 3.14% of accounts qualify as “skilled winners“—traders whose positions consistently predict both short-term price movements and event outcomes. Together with market makers, they capture more than 30% of all profits, remaining a small minority.
Meanwhile, approximately 67% of users fall into the inexperienced or unprofitable trader group. They generate the bulk of losses.
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“Their trades generate most of the volume, but little of the information, and their losses flow as profits to the informed minority. Prediction market accuracy thus reflects the wisdom of an informed minority, not the wisdom of the crowd,” the authors concluded.
Luck or Skill?
The researchers conducted 10,000 randomized simulations for each trader to separate skill from randomness. Approximately 60% of “lucky winners” lose their profit when tested on a new data sample. Only 12% of the most profitable accounts match the group of genuinely skilled participants.
Additionally, the study identified 1,950 accounts that opened before specific events and closed immediately after. These participants influence prices 7 to 12 times more per dollar invested compared to experienced traders.
As an example, researchers cited bets on the overthrow of Venezuelan President Nicolás Maduro—trades placed shortly before the US military operation.
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Regulators Gain a New Argument Against Prediction Markets
The study undermines a key narrative of prediction market platforms: the “wisdom of the crowd.” Polymarket and Kalshi executives have often claimed that collective participant intelligence makes their services more accurate than expert forecasts.
Regulators, including the CFTC, now have an additional argument. Platforms are not neutral aggregators of opinions but rather resemble classical financial markets with participant inequality and insider trading risks.
For ordinary users, the conclusion is simple. The probability of long-term profit on Polymarket is extremely low—more than two-thirds of traders are in the red.
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