Prediction markets are becoming more professionalized, but also harder to beat

WASHINGTON, D.C. - A Polymarket media exhibit at their pop-up experience launch shows data relating to potential political candidates popularity on March 20, 2026 in Washington, D.C. (Photo by Alex Kent/The Washington Post via Getty Images)The Washington Post | The Washington Post | Getty ImagesPrediction-market platforms' courtship of Wall Street stands to bring in deeper professional liquidity and intensify competition, but will also mean it's harder for many traders to make money.Roughly 27% of dollar profits were captured by just 3% of accounts that are "persistently skilled," repeatedly moving market prices towards outcomes that eventually occurred, according to an academic working paper analyzing $13.76 billion of Polymarket trades.Skilled accounts earned consistent profits by reacting more quickly to publicly available news, arbitraging inconsistent pricing across related contracts and trading against behavioral errors. But as more institutions chase the same discrepancies, prices adjust faster and the available edge becomes scarcer."If you have a lot of skilled people, then they compete, and in doing so, they make prices more correct," said Theis Jensen, Yale economist and ...