Polymarket Bettor Allegedly Rigged Weather Bet Using Hot Air From a Portable Device
Credit: HS You/Flickr
A Polymarket trader allegedly rigged a prediction market outcome by briefly heating up the air around a temperature gauge used to settle the market. It’s the latest in a series of high-profile headlines that call into question the fairness or lack thereof involved in prediction markets.
The bizarre story was covered by The Guardian and circulated on social media by a user who said, “A hair dryer at a Paris airport broke Polymarket weather markets & made someone $34,000 richer.”
Polymarket Manipulation Led to Longshot Payouts
According to the post, someone betting on Polymarket was aware that the temperature gauge used to settle bets about the weather in Paris was an accessible Météo France sensor near the Charles de Gaulle Airport. That person then used some kind of portable heating device, like a hair dryer, to cause a spike in the temperature reading.
The bettor allegedly bought shares of a longshot high temperature of 22 degrees Celsius (about 71 Fahrenheit) on April 15. It settled as the winning bet. The person reportedly did the same thing on April 6. Total winnings amounted to $34,000.
Based on The Guardian’s reporting, this narrative seems slightly more speculative. French police confirmed to the paper that they are investigating based on complaints by Météo France of suspected tampering, but the case remains open.
Longshot Weather Bets Yield Huge Returns Close to Deadline
Longshot outcomes on such markets can trade as low as 1 cent, offering a 99-1 payout. The user’s bets on 22 degrees were well above the month’s average high of 16 degrees in Paris. On April 15, the consensus line of 18 degrees had been trading as a very large favorite, nearing 100% probability in the graph shared on social media. A well-timed bet could have netted a very big payout for a small investment.
Weather markets are, along with “mentions,” some of the most popular non-sports options available on prediction markets. For instance, today’s average temperature in Paris produced more than $185,000 in trading volume. Similar markets at Kalshi also regularly produce six-figure volume. Taken as a daily average, the total volume of weather trading on Kalshi is similar to that of medium-popularity sports like UFC.
The outcomes of weather markets can be every bit as controversial as sports, too. Snowfall in New York City produced massive trading volume earlier this year. In at least one instance, some bettors were left furious when more than 12 inches of snow fell in parts of the city. However, the market rules specified that the National Weather Service’s Central Park measurement would settle the winning contracts. Fewer than 12 inches fell there, so “No” bettors cashed in.
In the case of the Paris weather markets, Polymarket has reportedly responded to the suspected rigging by changing to a different reference station.
‘If You Can’t Spot the Sucker…”
While Polymarket’s international product has often touted insider trading as a feature and not a bug, manipulating outcomes is another matter entirely. Its terms of use forbid:
“Entering, or attempting to enter, any buy or sell order if you hold a position of authority or influence sufficient to affect the outcome of the event underlying such Contract, or if you have been directed or solicited to enter such order by a person who holds such a position of authority or influence.”
Still, the early reports suggest the user who allegedly influenced the weather markets was able to cash out.
The outcome should serve as a clear warning to users. It reinforces an old truism about betting from experienced gamblers. That one goes something like, “if the outcome of a betting market can be known in advance, and you aren’t one of the people in a position to know the outcome, then don’t bet on it.”
This simple and salient advice can save bettors many headaches.
While weather outcomes obviously can’t be known for sure in advance, the mechanics of the measurement system expose them to potential manipulation. That’s just as dangerous, from a bettor’s standpoint. Perhaps more so, given the false sense of security. Even if the measurement system was foolproof, the possibility exists that the person producing the measurements could clue in connected bettors.
Bettors trading on these markets expose themselves to significant risk. They’re well-advised to read the fine print and consider all possible angles before purchasing any contracts. The only sure thing is that if there’s a way to manipulate a market for gain, someone will eventually think of it and implement it.
Image credit: HS You/Flicker (license)
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