An online prediction market platform has sparked fury among its users by refusing to pay out on millions of dollars in wagers concerning a potential US invasion of Venezuela, following the dramatic capture of the country's president.
The $10.5 Million Betting Controversy
The platform at the centre of the storm is Polymarket, which recently gained regulatory approval to operate in the United States. Traders had placed bets totalling a staggering $10.5 million on the likelihood of a US military incursion into Venezuela. The majority of these wagers were tied to a specific deadline of 31 January, with others set for the end of March and December this year.
The situation escalated rapidly last week. On Friday, an anonymous trader invested $30,000 on a market predicting "Maduro out by 31 January 2026." The following morning, Saturday, forces loyal to former US President Donald Trump successfully captured Venezuelan leader Nicolás Maduro in a snatch operation. Following this news, the trader's position showed paper profits exceeding $436,000.
Polymarket's Definition of an 'Invasion'
However, Polymarket has declared it will not yet settle the contracts. The platform's rationale hinges on its specific definition of an invasion. On its website, it states the bet refers explicitly to "US military operations intended to establish control." It argues that the mission to capture Maduro, despite involving a military incursion and the seizure of a head of state, does not meet this criterion.
"President Trump’s statement that they will ‘run’ Venezuela while referencing ongoing talks with the Venezuelan government does not alone qualify the snatch-and-extract mission to capture Maduro as an invasion," the platform clarified. Consequently, the priced-in probability for the question "Will the US invade Venezuela by 31 January?" had plummeted to below 5% by Wednesday morning.
Traders React with Anger and Accusations
The decision has provoked a fierce backlash from users on the platform. One trader, using the name Skinner, posted a scathing critique: "Polymarket has descended into sheer arbitrariness. Words are redefined at will, detached from any recognised meaning, and facts are simply ignored. That a military incursion, the kidnapping of a head of state, and the takeover of a country are not classified as an invasion is plainly absurd."
This controversy highlights the often murky and subjective nature of resolving contracts on prediction markets, which allow individuals to place binary bets on future real-world events. The incident is particularly sensitive for Polymarket, which counts Donald Trump Jr, the eldest son of the former president, among its advisory figures.
The platform's move to withhold payouts on such a significant volume of bets raises serious questions about governance and contract clarity in the rapidly growing world of event-based gambling and financial speculation, casting a shadow over its recent foray into the regulated US market.
