Is Polymarket Legit? Gambling Risks And Safety Explained

Polymarket is gambling and not a legit investment tool because you risk money to try to win more. On average, the “market” has to take from one trader to pay another.

Because it’s peer-to-peer and zero-sum, most users, especially sports bettors, will lose over time once you factor in fees on winning trades and the payment of any taxes owed.

Trading volume on Polymarket is also inflated, according to a Columbia University study published in November 2025. This can cause you financial harm.

In an attempt to build legitimacy, Polymarket partnered with the National Hockey League and the UFC. Don’t be fooled, as Polymarket is still a harmful gambling site.

Inflated Trading Volume on Polymarket

The Columbia University study said it uncovered evidence that a sophisticated manipulation technique called “wash trading” has significantly inflated betting volume on the online gambling platform Polymarket.

Why does it matter for consumers? You could be betting into fictitious money on Polymarket, which means the market could be rigged against you.

For example, Polymarket allows users to bet on the 2028 Democratic presidential nominee. The platform showed that more than $15 million has been bet on LeBron James to be the nominee. Chelsea Clinton, to name another example, has allegedly seen nearly $20 million in bets.

These Polymarket volume figures were allegedly fake.

Inflated trading volume could lead consumers to make decisions based on false and misleading information, resulting in financial harm. The study authors did not suggest that Polymarket itself was responsible for the wash trading.

Polymarket Fees

You must give Polymarket 2% of your profit. Like rival Kalshi, Polymarket users can expect negative returns.

In November, Polymarket announced that its U.S.-facing gambling site would also charge a fee of 0.01 cents per one-dollar contract traded.

That equates to a 0.01% fee, which is lower than Kalshi, but still enough to make you lose money on Polymarket over the long term.

No form of gambling can result in a positive return on investment (ROI).

Why Polymarket is Different Than Stocks

Prediction markets are zero-sum, as your gain is someone else’s loss — a loss that could cause serious harm to their life. Gambling sites such as Polymarket can hurt society and are not legitimate tools for growing an economy.

Moreover, being able to “sell early” doesn’t magically turn gambling into investing. On Polymarket, you don’t own a productive or legitimate asset. You’re betting on a market-resolution rule set by the platform.

When a Polymarket contract settles, the bet is over, and you are paid out for any winning shares. Over time, Polymarket siphons money from the public and causes harm.

The gambling platform is distinct from an equity that you can hold as a business grows (and potentially receive dividends).

Of course, stock speculation is gambling, but Polymarket is different from the stock market.

Risks of ‘Trading’ on Polymarket

You might wonder about the risks of “trading” on Polymarket. First off, it’s gambling, and the risks of Polymarket gambling include:

• Financial loss: In a zero-sum environment with spreads and slippage, the average user loses over time. More than likely, you will not get rich using Polymarket.
• Addiction: Design features, such as 24/7 access, constant “odds” updates, and push alerts, encourage compulsive checking and chasing.
• Weak consumer protections: Unregulated or poorly regulated products typically lack the deposit limits, cooling-off periods, and self-exclusion seen in licensed sportsbooks. Polymarket offers betting on sports like DraftKings Predictions.
• Data/crypto risks: If you’re using USDC and a crypto wallet, hacks, mistakes, or platform blocks can strand funds and potentially put your identity at risk.
• Information asymmetry & insider activity: Recent reporting around large, suspiciously well-timed “Nobel Prize” bets shows how a single informed actor can move markets — leaving regular users holding the bag and suffering harm.

In summary: Mechanics and psychological features that make Polymarket addictive and not legit include the fear of missing out, chasing losses, 24/7 access, push notifications, and compulsive checking.

Dr. Rani Hoff, Emeritus Professor of Psychiatry at the Yale School of Medicine, told GamblingHarm.org in an interview that “strategic” peer-to-peer gambling can be especially dangerous.

“In some ways, ‘strategic’ gambling is potentially more addictive because if you know what you are doing, you get that intermittent reinforcement more frequently,” Dr. Hoff said. “In poker, for example, you win more if you know what you’re doing. Intermittent reinforcement is the most powerful reinforcer for any living organism, for humans particularly.”

Buyer Beware: Polymarket Mention Markets

You need to be especially cautious of Polymarket’s so-called “mention markets.”

In an October 2025 earnings call, Coinbase CEO Brian Armstrong showed why to avoid these betting markets.

Near the end of the earnings call, Armstrong had the list of words from Polymarket in front of him. He decided to rapidly read off the words that had not been said yet. It was an egregious market manipulation that caused many people to lose money. Some people won money directly from Armstrong’s unethical behavior.

Armstrong demonstrated that participants and insiders can corrupt mention markets. Beware of trading on them, even though CFTC-registered platforms offer them as legitimate products.

How Legal and Legit is Polymarket?

As of December 2025, Polymarket was not an authorized or legit real-money platform for U.S. retail users. In 2022, the CFTC fined Polymarket $1.4 million and ordered it to wind down non-compliant markets and cease violations. In 2025, Polymarket received approval to relaunch in the U.S.

Recent reports indicate that federal investigations into Polymarket closed without new charges, and the company was exploring a regulated U.S. return path. Polymarket’s relaunch could come ahead of the 2026 NFL Super Bowl.

Parents should warn their kids about the dangers of Polymarket.

Abroad, Belgium blacklisted Polymarket in early 2025, and Colombia’s regulator moved to block access in September 2025 over illegal political betting.

Previously, Polymarket stated that there are no trading fees, but that does not eliminate the structural risks. You must pay fees on any winnings, and you are still required to pay taxes on earnings.

Ethical Considerations

Polymarket allows gambling on war, including conflicts involving Russia and Ukraine, the United States and Venezuela, Pakistan and India, and the genocide in Gaza.

The platform also took bets on the Brown University mass shooting in December 2025.

You could argue that using Polymarket supports harmful betting on human suffering.

Is Polymarket Safe for Beginners?

No, Polymarket is unsafe and not a legitimate way for people to learn how to bet. Beginners face steep information gaps versus high-volume traders or market insiders. Furthermore, online betting platforms can be addictive.

Add in inflated trading volume, crypto risks, resolution-rule fine print, and convoluted country-by-country rules, and the learning curve becomes steep for newbies.

Polymarket is not safe for beginners because:

• The peer-to-peer format and “order book” are more complex than house-banked betting.
• Pricing and timing entries/exits require extensive experience.
• Ambiguous or technical market rules can punish inexperience.

Ultimately, Polymarket is unsafe because it’s a habit-forming product that triggers dopamine. As Dr. Hoff said above, it provides powerful intermittent reinforcement.

Bottom line: You can become addicted to using the Polymarket platform.