Prediction platform Polymarket has joined forces with Palantir Technologies and TWG AI, the artificial intelligence arm of TWG Global, to create a surveillance system designed to detect suspicious activity and potential manipulation in sports prediction markets.
The collaboration comes as prediction markets face rising scrutiny over the possibility that traders could profit from insider information.
The new monitoring framework will combine Palantir’s data infrastructure with TWG AI’s analytical tools to track trading across Polymarket’s markets. According to the companies, the system will analyze trading behavior, flag irregular activity, verify participants and generate compliance reports that could be shared with regulators or sports organizations.
Polymarket founder and CEO Shayne Coplan said the effort aims to introduce advanced oversight tools to sports prediction markets and strengthen confidence among leagues, teams and market participants in the fairness of competitions.
The move reflects the growing pressures facing prediction markets as they transition from small crypto-native experiments into platforms that increasingly influence discussions about elections, economic developments and major sporting events.
Prediction markets enable users to buy and sell contracts linked to the outcomes of real-world events. Supporters argue that because participants stake money on their predictions, these markets can efficiently gather dispersed information and often generate reliable forecasts.
However, the structure also introduces risks.
Critics have warned that individuals with early or privileged knowledge could potentially profit before information becomes public. In recent years, markets have appeared around sensitive developments such as government policy decisions, military actions, labor disputes and political pardons, prompting debate over whether some traders may be acting on inside information.
Carlos Pereira, a general partner at BITKRAFT Ventures — a firm overseeing more than $1 billion in investments across gaming, artificial intelligence and digital assets — said those concerns could become a major challenge for the sector if they are not addressed.
“There has been what appears to be insider trading,” Pereira said, warning that negative headlines could damage an industry that is still building trust and credibility.
The surveillance system Polymarket is developing mirrors the monitoring infrastructure used by traditional financial exchanges. The company said the platform will track trading activity before and after orders are placed, detect coordinated behavior and identify traders who may be restricted from participating.
For prediction market operators, the issue is also closely tied to regulation. Clear insider trading rules for these markets remain undefined in many jurisdictions, particularly in the United States, where regulators continue debating how prediction markets should be classified.
Strengthening internal monitoring could help the industry demonstrate that it is capable of regulating itself.
Without those safeguards, Pereira warned, regulators may feel compelled to step in more aggressively.
“If markets don’t show they are trying to manage insider trading,” he said, “the odds of regulation becoming harsher and tapering growth would be much higher.”
