At first glance, the blockchain-based betting platform Polymarket might appear to be just another technical curiosity from the world of cryptocurrencies. But a closer look reveals a profound social phenomenon: the gamification of political and societal reality. If you want to know what people believe is likely to happen—and are willing to back up with real money—you’ll find Polymarket to be a fascinating, if deeply ambivalent, arena.
What is Polymarket?
Polymarket is a so-called prediction market—a digital platform where users can bet cryptocurrency on the outcome of future events. These markets function via binary options: a question is posed (“Will Candidate X win the election?”), and users purchase shares in “Yes” or “No.” The prices of these shares reflect the aggregated expectations of the market—essentially a real-time, financially incentivized probability assessment .
Unlike traditional bookmakers who set odds, Polymarket relies on swarm dynamics. Users buy and sell shares like stocks, with the system governed by smart contracts on the blockchain. The market itself determines which predictions are offered—often based on user suggestions.
Betting on the Pope – or the Apocalypse
The spectrum of prediction markets ranges from traditional political events—such as predicting the next US president—to more unsettling scenarios: Will a nuclear bomb be detonated in 2025?, Will Israel launch another ground offensive in Gaza?, Will China invade Taiwan? .
One particularly media-relevant example was the 2025 papal election. While cardinals convened in the Sistine Chapel, thousands of users on Polymarket placed bets on who would become the next pope—amounting to millions in wagers. Some users reportedly earned five-figure sums by correctly predicting the outcome .
The Promise: Swarm Intelligence Meets Capitalism
Supporters view Polymarket as a digital oracle—a tool that focuses collective wisdom through financial commitment. In fact, Polymarket’s predictions have often outperformed traditional polls, such as during the 2024 U.S. presidential election . The underlying idea isn’t new: Austrian economist Friedrich Hayek argued that market prices embody aggregated knowledge. Polymarket pushes this principle to the extreme—a radicalized capitalism in search of truth.
The Dark Side: Manipulation, Cynicism, and Democratic Risks
But this blend of money, opinion, and visibility carries significant risks. In an age of growing information insecurity, platforms like Polymarket encourage a stock market mindset toward politics—something to observe and speculate on, but no longer shape.
The potential for manipulation is especially concerning. In small and illiquid markets—such as German federal elections—even modest sums can distort the odds and produce misleading signals . If media outlets report on these odds, a feedback loop emerges: what started as a bet begins to influence public expectations.
A dramatic case: In 2024, one user reportedly wagered over $28 million on Donald Trump’s victory, funding his own polling research to influence market sentiment—and allegedly profiting $80 million .
Ethical Red Flags
Polymarket permits bets on war, flight, nuclear weapons—topics with grave human consequences. What may seem like harmless speculation often turns out to be cynical. When people bet on the outcome of war in Gaza or the number of deported migrants, human suffering becomes a speculative asset. The platform is banned in the U.S. and other countries for offering unregulated and illegal gambling .
Another troubling issue: Polymarket can become a driver of public discourse. Who decides what can be bet on? Who prevents insider trading? What happens when public sentiment is shaped more by markets than by dialogue?
Legal Classification Under German Law
Between Oracle and Offense: As innovative as Polymarket may be, its use in Germany poses significant legal risks—for both operators and users.
Criminal Liability for Providers
According to § 284 of the German Criminal Code (StGB), it is a criminal offense to offer or facilitate gambling without the necessary license. This applies even if the platform is hosted abroad—what matters is whether it targets German users, e.g., through German-language content or marketing .
A license from another EU country does not suffice: Unlike other services, gambling does not fall under the EU freedom to provide services unless harmonized at the European level . Providers operating without a valid German concession face prosecution—and may be required to refund player losses.
Criminal Liability for Users
Players are not exempt from liability: § 285 StGB makes participation in illegal gambling a criminal offense. Even conditional intent—merely suspecting the offer may be illegal—is enough for liability . Banks increasingly flag unusual deposits from betting sites, triggering anti-money-laundering reports.
Germany’s Federal Court of Justice (BGH) has consistently ruled that contracts based on illegal gambling offers are void under § 134 of the Civil Code . This may entitle users to reclaim lost funds under § 812 BGB, but enforcement is challenging—especially with foreign providers shielded by complex corporate structures.
Political Implications
Polymarket also raises concerns about the integrity of democratic processes. If platforms are manipulated—say, by wealthy individuals “buying” odds—they may influence elections indirectly. This kind of influence sits uncomfortably with the democratic ideal of an informed citizenry.
Whether Polymarket represents a new form of collective intelligence or a cynical betting system that erodes moral compasses and democratic processes remains open. But one thing is clear: When the apocalypse becomes a betting market, it’s time to reflect ethically and legally on the limits of digital speculation.
Conclusion
Polymarket is a fascinating technological artifact—a mirror of what people believe is likely, fused with the thrill of financial speculation. But it also reflects a society where uncertainty becomes the basis of speculation, and where the boundaries between information, entertainment, and capital blur.
Legally, however, betting on political events via unlicensed platforms is clearly problematic—and potentially criminal—in Germany. The line between blockchain and criminal law is thin but sharp.
Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
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