Has Polymarket activity changed the narrative of the Dublin Central by-election?

The build up to a by-election typically involves the scrutinisation of local issues and lengthy introductions to candidates often unknown to the electorate.

But this time around, much of the coverage of the battle for Pascal Donohoe's recently vacated Dublin Central seat has instead been focused on a “Wild West” of unregulated betting.

Experts say a high volume of bets on Polymarket may shift voters' perception before they head to the polls on May 22, with the Government expressing “grave concern” at the nature of some activity on the platform.

Polymarket is a prediction market where users buy and sell “shares” in Yes/No outcomes. As of May 21, the Social Democrats’ Daniel Ennis is trading at $0.79 with Sinn Féin’s Janice Boylan at $0.169 and Independent Gerard Hutch at $0.05. Thus, the market believes Daniel Ennis has around 79% chance of winning this election.

Despite these figures being in line with most bookmakers, where Ennis is also the frontrunner, much of user activity on PolyMarket has been the source of scrutiny.

An Irish Times investigation classified 86% of trades on the election as ‘suspicious’, meaning instances where users bought $500 worth of ‘No’ positions before ‘cashing out’ within hours for minimal profit/loss.

Polymarket shows that $500,000 is the total volume of trades placed on Gerard Hutch. Despite reports suggesting otherwise, this does not mean that $500,000 has been bet on him to win, nor does it mean there is $500,000 wagered on him right now. Rather, it shows the total traded since the market opened in February. 92% of bets placed on Hutch on Polymarket have been classed as suspicious by the Irish Times.

Though there is no evidence of any wrongdoing on behalf of any candidates in the Dublin by-election, a high volume of trades could theoretically help their chances.

A 2012 study from the Encyclopedia of U.S. Campaigns, Elections, and Electoral Behavior on the media coverage of politics states that elections are often viewed through a “horse-race” lens; who is up, who is down, and who appears to have momentum. A claim that a large sum of money has been wagered on a candidate to win could therefore be interpreted as evidence of public confidence, insider knowledge or a late surge behind his campaign.

“I would advise a candidate to put a few quid on themselves to get the media talking about them as a contender,” said Eoin O’Malley, author and Associate Professor in political science at DCU.

“The perception of being a contender can become a self-fulfilling prophecy. Many candidates who might have been in contention might have dropped off voters' radars, and supporters of some parties might be disinclined to vote if their candidate is thought to have no hope.”

Elsewhere, over $180,000 has been traded on Gillian Sherratt, with her perceived chance of election on Polymarket spiking to 7% on April 29, two months after her Dáil ambitions effectively ended when she lost out on the Sinn Féin nomination in February.

Polymarket declined to comment when asked by Hot Press to respond to claims of suspicious trading on their platform. They also declined to comment on what safeguards they have in place to detect wash trading, market manipulation, or other suspicious behaviour.

Since it was founded in 2020, there have been no reports that activity on Polymarket has directly changed the outcome of an election. However, it is changing the way elections are being covered. RTÉ, the Irish Independent, the Irish Times, Breakingnews.ie, and Newstalk have all referenced Polymarket in their by-election coverage.

During the 2024 US presidential election, Polymarket shifted from a fringe crypto-betting platform to a staple in mainstream media. News organisations increasingly used its real-time odds alongside traditional polling data to gauge candidate momentum.

“People placing money means they have skin in the game,” O’Malley adds. “Some people bet what they want to happen, but I assume most bet on what they think will happen. And people often know things that newspaper analysts or academics don't know”.

Despite all the furore and suspicion around some of the trading taking place, others believe that the platform’s reach has not reached a stage where it could have significant influence over the outcome of the Dublin by-election. After all, it’s not an entirely new phenomenon - opinion polling and bookmakers have long gauged public perception ahead of elections.

“Polymarket is too niche to have a mass effect on the outcome itself, " reflects polling analyst and Founder of Ireland Thinks Kevin Cunningham. “It happens in the UK at a tiny level, but it's a complete waste of time. Any attempted distortion is very quickly swallowed up by other punters betting against that money.”

Future of Polymarket

Still, trades made on the Dublin Central by-election have put the role of prediction market platforms in Ireland under the spotlight, with Minister for Justice Jim O’Callaghan telling Hot Press that “It may be an issue that requires investigation by the Gambling Authority or the Electoral Commission.”

As it stands, Polymarket operates in a legal grey area. Irish users can still access and trade on the platform, despite it operating outside of the Gambling Regulation Act 2024. This means that Irish users who use the platform do so without the protections offered by the act, as a ‘decentralised prediction market’ doesn’t adhere to traditional safe gambling regulations.

Polymarket has also been central to controversies surrounding insider trading. Earlier this year, US army special forces soldier Ken Van Dyke was arrested after learning of plans to capture Venezuelan president Nicolas Maduro and wagering over $30,000 on Polymarket bets on the timing and outcome of the operation, winning over $400,000. He was subsequently charged with unlawful use of confidential information for personal gain, theft of nonpublic government information, fraud, and making an unlawful monetary transaction.

Then there's the fact that Polymarket is entirely built on cryptocurrency: a highly speculative, unregulated financial asset without traditional consumer protections.

The US, UK, and France have moved to block Polymarket over concerns that it violates gambling and sports betting regulations. The discourse from our own government suggests Ireland may move to do the same in the future.

"The developments that we have seen reported in recent days around the use of polymarkets to place suspicious bets on Irish elections also raises grave concerns for me,” said Tánaiste and Minister for Finance Simon Harris. “I have asked my officials today to do a deep-dive analysis into this area.”

How swiftly and effectively they act is anyone's bet.