Polymarket is recruiting staff for an internal market-making team that may trade against users on its platform.

The company has recently approached traders — including sports bettors — about joining the group, Bloomberg reported on Thursday, citing people familiar with the discussions.

The initiative comes as Polymarket expands its US presence after resolving regulatory issues stemming from a 2022 case, when it paid a $1.4 million penalty to the Commodity Futures Trading Commission. 

Event contracts on Polymarket. Source: Polymarket

Kalshi, a Polymarket competitor, already operates an internal unit known as Kalshi Trading, which places bids on its exchange to help support liquidity. The arrangement has drawn criticism from some users, and a proposed class-action lawsuit filed last month alleged that the desk sets betting lines that disadvantage customers.

Both Polymarket and Kalshi have also sought external participants to supply liquidity on their platforms. On Kalshi, companies such as Susquehanna International Group have taken on market-making roles.

Cointelegraph reached out to Polymarket for comment but had not received a response at time of publication.

Related: Polymarket is opening US app to waitlisted users after CFTC green light

Coinbase CEO takes on prediction markets

Prediction markets such as Polymarket and Kalshi have experienced significant growth in recent years, with both companies securing new partnerships and reaching high private-market valuations as the sector expands.

The platforms enable users to bet on a wide range of events, from sports to predicting the next day’s weather in New York City.

During The New York Times’ DealBook Summit on Thursday, Coinbase CEO Brian Armstrong argued that prediction markets’ trading desks could strengthen such markets’ accuracy.

Source: Polymarket

“If your goal is for the 99% of the people trying to get a signal about what’s going to happen in the world […] you actually want insider trading,” he said, adding that traders would benefit from “really good information” and “get a higher quality signal out of them.”

He added:

“Now, if you want to preserve the integrity of those markets, maybe you don’t want insider trading. So there might be like a decentralization test that has to go in here, but it’s not a clear cut answer.”

BlackRock CEO Larry Fink, who was also part of the discussion, was not so enthusiastic about prediction markets.

“We try to help people navigate a 30-year outcome,” Fink said. “I don’t really care about what happens in the next moment. I’m aware in the betting market, in football, you can bet every play, but to me, this is not how I’m going to live my life.”

In the third quarter of 2024, prediction markets saw a combined volume on the three largest platforms increase by 565% to $3.1 billion, up from $463.3 million in the prior quarter.

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