A new study has detailed how botted bettors were able to profit by more than $40m through arbitraging markets on the popular predictions platform Polymarket. This means that certain users were able to get risk-free returns by taking advantage of mispriced bets.
Guillermo Suarez, Luciana Kieffer, Vahid Ghafouri, and Oriol Saguillo compiled this research as part of their work for the IMDEA Networks Institute. They analyzed 86 million wagers placed from April 2024 to April 2025.
They discovered certain accounts linked to arbitrage betting, with the top three placing over 10,200 wagers during this timeframe and profiting by about $4.2m apiece.
While traditional sportsbooks are very careful about pricing event odds to ensure that arbitrage opportunities rarely, if ever, arise, this is not the case for the likes of Polymarket. As the odds are based on market sentiment rather than being set by traders, it opened up arbitrage opportunities.
occasionally the total odds for an event go above the 100% mark due to short-term fluctuations
The researchers found that occasionally the total odds for an event go above the 100% mark due to short-term fluctuations, which presents a chance for people to take advantage. The traders focused both on single markets and across multiple markets where the result of one event influenced another.
The type of market most profitable for bettors were politics-related ones, despite there being fewer of these compared to sports events. The typical profit margin for the arbitrage trades was between 1% and 5%.
The researchers concluded that blockchain-based prediction markets will still be vulnerable to arbitrage models from skilled traders going forward.
