From theblock by James Hunt

Blockchain analytics firm Chainalysis estimates the pseudonymous Polymarket whale named “Théo,” also known as “Fredi9999,” has made a net profit of $78.7 million on U.S. election bets. These included wagers on Donald Trump to win the presidency, the swing states of Pennsylvania, Michigan and Wisconsin and the popular vote — an outcome many saw as unlikely.

Théo came to prominence earlier in the election campaign amid allegations of manipulation related to a single entity managing multiple accounts on the decentralized predictions platform, seeking to skew the odds in Trump’s favor.

Polymarket's own investigation in October claimed there was no evidence of market manipulation following large U.S. election whale bets, supporting the view that prediction markets simply reflect all available information at a given moment, according to analysts at trading and financial services firm Presto. The platform’s U.S. presidential market generated nearly $3.7 billion in trading volume during the campaign.

At the time, Polymarket revealed that a whale behind four large accounts who spent more than $45 million on Polymarket bets for Trump to win the U.S. presidential election was a French national with extensive trading experience and a financial services background.

However, fresh data from Chainalysis late Wednesday suggests the whale appeared to control a total of nine Polymarket accounts based on their funding patterns, timing of transactions and cash outs to specific crypto exchange deposit addresses.

“Based on Polymarket’s calculations, these addresses appear to have earned a net profit of nearly $79 million betting primarily on a Trump victory,” Chainalysis said — larger than previously reported estimates following the market's resolution.

French whale's Polymarket net profits. Image: Chainalysis.

Polls should have measured the ‘neighbor effect’

According to a Wall Street Journal report on Wednesday, Théo took a different approach to analyzing voting intentions. Picking up on alternative polls asking people, “who are your neighbors voting for?” rather than “who are you voting for?” the trader noticed they had Trump overperforming. This prompted the French national to commission their own poll to confirm the data in a bet against the accuracy of traditional polling methods.

Traditional polls failed to account for the “shy Trump voter effect,” Théo told the WSJ. “Either Trump backers were reluctant to tell pollsters that they supported the former president, or they didn’t want to participate in polls.”

“What a killer example of how betting markets can surface contrarian, high-quality signals,” one community member said on X.

The election result is something of a vindication for Polymarket, with detractors pointing toward prediction platforms having a mixed elections track record, whales skewing the market or potential bias due to a dominance of men, crypto-natives and non-U.S. traders using the platform. “Legacy media can't comprehend that their polls were wrong and Polymarket was right,” Casa co-founder and CSO Jameson Lopp said on Wednesday. “Money talks. You just have to listen.”

French national gambling authority investigating Polymarket amid potential ban

Meanwhile, a spokesperson for the French national gambling authority, the Autorité Nationale des Jeux (ANJ), told The Block that it was aware of Polymarket and is investigating the operation and compliance of the site with French gambling laws amid a surge in demand during the U.S. election and the scrutiny over Théo’s betting activity on the platform.

The ANJ may ban access to Polymarket users in the country, French crypto news outlet The Big Whale first reported on Wednesday.

Online gambling is strictly regulated in France, and any new gambling market requires prior authorization from the ANJ.

U.S. users are already theoretically banned from using the decentralized platform following Polymarket’s settlement with the Commodity Futures Trading Commission in January 2022 over charges of offering unregistered event-based binary options contracts. However, some users may attempt to bypass restrictions using a VPN, and regulated alternatives like Kalshi also gained popularity in the country during the election amid the firm’s September court victory against the same agency.