Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioPolymarket infuriated traders this week after it didn’t settle millions of dollars in wagers placed on the U.S. invasion of Venezuela, arguing that the capture of Venezuelan President Nicolás Maduro by the U.S. on January 3 doesn’t meet the platform’s definition of an “invasion.”
The prediction market’s position follows a dramatic weekend operation that saw U.S. Special Operations Forces detain Maduro and whisk him out of the country. Users on Polymarket expressed outrage, believing the event should have triggered the “Will the U.S. invade Venezuela?” market. That question has more than $10 million in open wagers that many expected to resolve as a winning outcome.
Why Polymarket Says Operation Doesn’t Count as an Invasion
Despite the scale of the operation, with Maduro and his wife Cilia Flores captured and flown to the U.S., and an estimated 80 people killed in the raid, Polymarket said the contracts wouldn’t resolve “Yes.” While what happened in Venezuela may fit the textbook definition of an invasion, under the contract’s terms, a qualifying invasion requires U.S. military operations intended to establish control over Venezuelan territory.
On the market’s rules page, the platform states that a qualifying invasion refers to “US military operations intended to establish control.” It added: “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.”
Polymarket is a peer-to-peer platform that uses a decentralized dispute-resolution process tied to the specific language in its contracts, a structure that can leave outcomes unsettled when real-world events don’t map cleanly onto predefined terms. As of this writing, it doesn’t appear that a formal challenge has been initiated, so the market will continue to operate under Polymarket’s interpretation of the contract’s terms.
While traders expressed considerable frustration about the “Will the U.S. invade Venezuela by…?” market, some happy Polymarket users were on a related market that bet on Maduro being removed from office by the end of January. In what many are calling a case of insider trading, a newly created account turned a roughly $32,000 wager into more than $400,000 in profits, with others walking away winning several thousand dollars.
Trader Backlash & Credibility Questions
Even though Polymarket has a well-established dispute-resolution process in place, that didn’t stop traders from calling the platform out for what they perceived to be a last-minute bait-and-switch when it added additional context to the contract terms.
Among the more than 1,000 comments on the “Will the U.S. invade Venezuela by…?” page, one of the most liked responses said, “Pretty sure this should be yes after Trump said approximately 20 times in his press conference that the US now controls Venezuela.”
Another user wrote, “Polymarket has descended into sheer arbitrariness. Words are redefined at will, detached from any recognized 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.”
Others mocked the logic of the contract terms, asking whether the U.S. has somehow used “teleportation” to remove Maduro without ever setting foot on Venezuelan soil. Many of those commenting raised concerns about the fairness and transparency of the platform.
What many of the traders seemed to overlook was the fact that the contract terms gave a very narrow definition of what would be considered a U.S. invasion, and regardless of anyone’s opinion, whether right or wrong, it’s the contract terms that ultimately determine whether a market resolves “Yes.”
This latest controversy comes as Rep. Ritchie Torres (D-NY) introduced a bill on Monday to make it unlawful for federal officials to trade on prediction markets involving government policy, government action, or political outcomes. Prediction markets rely heavily on user trust, and high-profile disputes like these have the potential to erode confidence in the platform’s ability to consistently and credibly resolve outcomes.
It appears Polymarket isn’t going to back down from its interpretation of the contract terms, at least for now. However, the backlash suggests that how prediction markets define and enforce their rules may be just as important as the event on which users are betting.
We reached out to Polymarket for comment, but haven’t received a response.
