In recent months, bettors on the crypto prediction platform Polymarket have gained recognition for their ability to surpass traditional bookmakers in predicting outcomes. However, the results of the recent papal conclave caught them off guard, raising questions about the reliability of betting markets like Polymarket.
On Thursday, Robert Francis Prevost emerged as the unexpected winner of the conclave. Leading up to the event, bettors had given the US-born cardinal a mere 1% chance of succeeding Pope Francis, while Cardinal Pietro Parolin topped the odds with a prediction rate of 28%. With over $28 million wagered on candidates other than Prevost, this unexpected outcome led to significant losses for many bettors.
This incident challenges the narrative that platforms like Polymarket offer superior predictive accuracy compared to conventional polls. Unlike traditional betting venues, Polymarket reflects real-time user demands, where odds fluctuate based on the volume of bets. The logic is straightforward: an increase in demand for a specific outcome translates to higher odds and prices.
Polymarket first garnered mainstream attention in November when bettors assigned Republican candidate Donald Trump remarkably higher odds than other sources for the U.S. presidency. According to Koleman Stumpf, an economics professor at Wake Forest University, Polymarket’s pricing closely mirrored the insights of savvy investors, suggesting a slight edge in predicting electoral outcomes.
A historical analysis by data scientist Alex McCullough demonstrated that Polymarket has accurately predicted global events with a 90% success rate one month in advance. Yet, the papal conclave result deviated sharply from these trends.
What Went Wrong?
Domer, one of Polymarket’s leading pseudonymous bettors, offered insight into the complications surrounding the conclave. The unpredictability of such events often translates to overwhelming uncertainty, leading bettors to rely on traditional market opinions rather than their expertise. Domer likened the betting environment to “walking into a store that doesn’t communicate with the outside world,” indicating that even participants might struggle to predict outcomes accurately.
The infrequent nature of papal conclaves also contributed to the confusion. With Pope Francis appointed back in 2013, many bettors on Polymarket likely lacked experience in wagering on such a rare event. In contrast, political elections, where the platform has demonstrated greater accuracy, occur more regularly and are generally more comprehensible.
Domer suggests that the real strategy for betting on a conclave is less about pinpointing the correct candidate and more about betting against candidates with inflated odds. High public visibility and media attention likely skewed perceptions of candidates like Parolin and Cardinal Luis Antonio Tagle, both of whom received odds that some consider unsustainably high.
In summary, while Polymarket has served as a powerful tool for forecasting electoral outcomes, the recent papal conclave highlights the complexities inherent in predicting unpredictable events. As the platform continues to evolve, understanding the nuances of different betting markets remains crucial for users aiming to make informed decisions.
Read more: Polymarket is 90% Accurate in Predicting World Events: Research
