Prediction markets promise retail users a direct way to bet on real-world outcomes. However, new data shows that profits are concentrated among a small group of traders.
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A Bloomberg News analysis of every active Polymarket wallet since the start of 2025 shows how those profits are distributed. More than 100,000 wallets lost at least $1,000 — nearly double the number that gained the same amount.
Distribution of Gains and Losses
The bulk of profits went to a small group of high-volume traders, likely running automated strategies. Strip out those top winners and the rest of the user base recorded a combined net loss of $131 million.
Separate on-chain analysis points in the same direction. One study found that roughly 70% of Polymarket trading addresses have recorded realised losses, with profit distribution similarly concentrated in a small fraction of accounts.
“If you want to participate and you want to make a living out of this, you better be pretty darn good,” said Charles Martineau, a professor at the University of Toronto’s Rotman School of Management.
Why the Structure Produces This Outcome
The pattern reflects how open exchanges work. Traditional sportsbooks often limit or ban consistently profitable bettors to protect their margins. Polymarket does not.
That makes it an attractive venue for quantitative traders who treat retail order flow as a source of liquidity — and as retail activity grows, conditions for systematic strategies improve alongside it.
The dynamic is not specific to prediction markets. It closely resembles outcomes in leveraged retail trading, where regulators in multiple jurisdictions have documented for years that a majority of accounts lose money.
What This Means for Brokers and Platforms
For quantitative funds and high-frequency traders, the Bloomberg data confirms what many already suspected: a large and consistent pool of less-informed flow on an accessible, regulated platform.
For brokers distributing these markets, the dynamic is familiar: most retail clients lose money, as in other leveraged trading products. The difference is how that outcome is framed, and how regulators may respond when detailed loss data is revealed.
Prediction markets promise retail users a direct way to bet on real-world outcomes. However, new data shows that profits are concentrated among a small group of traders.
Singapore Summit: Meet the largest APAC brokers you know (and those you still don’t!)
A Bloomberg News analysis of every active Polymarket wallet since the start of 2025 shows how those profits are distributed. More than 100,000 wallets lost at least $1,000 — nearly double the number that gained the same amount.
Distribution of Gains and Losses
The bulk of profits went to a small group of high-volume traders, likely running automated strategies. Strip out those top winners and the rest of the user base recorded a combined net loss of $131 million.
Separate on-chain analysis points in the same direction. One study found that roughly 70% of Polymarket trading addresses have recorded realised losses, with profit distribution similarly concentrated in a small fraction of accounts.
“If you want to participate and you want to make a living out of this, you better be pretty darn good,” said Charles Martineau, a professor at the University of Toronto’s Rotman School of Management.
Why the Structure Produces This Outcome
The pattern reflects how open exchanges work. Traditional sportsbooks often limit or ban consistently profitable bettors to protect their margins. Polymarket does not.
That makes it an attractive venue for quantitative traders who treat retail order flow as a source of liquidity — and as retail activity grows, conditions for systematic strategies improve alongside it.
The dynamic is not specific to prediction markets. It closely resembles outcomes in leveraged retail trading, where regulators in multiple jurisdictions have documented for years that a majority of accounts lose money.
What This Means for Brokers and Platforms
For quantitative funds and high-frequency traders, the Bloomberg data confirms what many already suspected: a large and consistent pool of less-informed flow on an accessible, regulated platform.
For brokers distributing these markets, the dynamic is familiar: most retail clients lose money, as in other leveraged trading products. The difference is how that outcome is framed, and how regulators may respond when detailed loss data is revealed.