Polymarket has announced a strategic collaboration with Palantir Technologies Inc. and TWG AI to oversee its sports contracts and combat insider trading. The platform, designed in partnership with Palantir and TWG AI, will highlight suspicious activities and screen users against established sports betting restrictions.

“Teaming up with Palantir and TWG AI empowers us to utilize top-tier analytics and oversight in the sports market,” commented Shayne Coplan, CEO of Polymarket.

The new system will be implemented at a U.S.-regulated platform that is currently in development, sources familiar with the agreement informed Bloomberg. Notably, Polymarket’s primary trading venue operates offshore and does not cater to U.S. customers.

The Vergence AI engine, developed last year as part of a collaboration with Palantir and TWG AI, will act as the technical backbone for enforcing integrity measures within the sports market.

Vergence.AI integrates advanced technical and financial service infrastructures to bolster Polymarket’s integrity framework for sports. This includes comprehensive trade monitoring, near real-time detection of potential manipulations, screening against prohibited participant databases, and automated trade alert generation.

Polymarket, along with its key rival Kalshi, has witnessed a notable increase in trading activity over the past year, largely fueled by sports-related contracts. However, regulators and industry experts have raised concerns about preventing insider trading in prediction markets, which span elections, international affairs, and sports.

Major professional sports leagues, such as Major League Baseball and the National Basketball Association, have previously dealt with allegations of players colluding with gamblers. Critics have voiced that prediction markets could serve as a platform for individuals with inside knowledge to gain profit.

While Polymarket has been relatively discreet regarding its anti-insider trading protocols, sources revealed to Bloomberg that the company is collaborating with compliance provider IC360, which monitors unusual betting patterns in sports and gaming.

In contrast, Kalshi has adopted a more transparent strategy. The platform recently reported two instances of insider trading to the Commodity Futures Trading Commission and has set up a committee to provide quarterly reports on flagged trades and investigations, along with referrals to governmental bodies.

Prediction markets have come under intensified scrutiny recently over contracts related to conflicts in the Middle East. Both platforms provided betting options regarding developments in Iran; following the passing of Ayatollah Ali Khamenei, Kalshi refunded users for their net losses and related fees.

Palantir, co-founded by billionaire Peter Thiel, is renowned for its collaborations with U.S. military and intelligence sectors. Recently, it launched a joint venture with TWG Global to broaden the use of artificial intelligence within financial institutions.