Galaxy Research analysis of 2.9M Polymarket accounts shows 69% of retail traders lost money, totaling $338.9M in aggregate losses, amid rising legal challenges in the US and South Korea.
Regulation & Gov ·
Galaxy Research analyzed 2.9 million retail accounts on Polymarket and found that more than 69% ended at a loss, collectively totaling $338.9 million in losses. The study drew on Polymarket's full on-chain history and excluded roughly 125,429 automated accounts representing 4.1% of wallets but 80.8% of trading volume. Among human traders, the median loss was around $3, though a smaller cohort suffered losses in the thousands—and accounts that lost money were significantly more likely to become inactive within 30 days.
Galaxy's research revealed performance disparities across trading styles. Specialists—those concentrating over 60% of activity in a single category—were less profitable than generalists: 28% versus 30.4% of profitable accounts. Sports specialists performed worst, while tech and science traders achieved profitability rates near 41.2%, possibly reflecting deeper subject expertise. Profitable traders also placed larger bets and traded more frequently, though holding duration showed no clear relationship to outcomes.
Polymarket faces mounting legal headwinds. Baltimore and New York have sued the platform over unlicensed sports gambling and age-verification failures. South Korean authorities opened cases against 26 users and referred 18 to prosecutors involving approximately $12.7 million in bets, examining whether the activity qualifies as illegal gambling. The legal exposure extends across jurisdictions as regulators question whether prediction market contracts resemble traditional wagering products.