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Donald J. Trump posted a colorful graphic on social media this week, suggesting that he was headed for victory in the presidential election.
The graphic showed that Mr. Trump had a 64 percent chance of defeating Vice President Kamala Harris next month — a much rosier picture for him than the polls that indicate the election remains a tossup. Mr. Trump’s post was liked more than 10,000 times, as his fans responded with emojis of raised fists and Americans flags.
The election odds cited by Mr. Trump came from a crypto-powered gambling website called Polymarket. Using digital currencies, gamblers on Polymarket have wagered more than $100 million on the outcome of the presidential race, turning the site into the internet betting phenomenon of the 2024 election.
Elon Musk has promoted Polymarket’s odds on X, calling them “more accurate than polls, as actual money is on the line.” CNN and other news media organizations have featured the projections in their election coverage. And as the market has swung heavily in Mr. Trump’s favor, he has relentlessly publicized the site’s numbers, seeking to create a sense of inevitability about the election’s outcome.
“A gambling poll, as they call it,” Mr. Trump said recently of Polymarket. “I don’t know what the hell it means, but it means that we’re doing pretty well.”
But Mr. Trump’s apparent lead may be an illusion. The odds on Polymarket began favoring him this month after just four accounts, with user names like Fredi9999 and PrincessCaro, bet more than $30 million on a Trump victory, according to an analysis of transaction records by Chaos Labs, a crypto data provider. Polymarket said on Thursday that all four accounts were controlled by one person, whom it described as a French national with a financial services background, without revealing the person’s identity.
The election betting has placed enormous scrutiny on Polymarket, a start-up based in New York that allows people to wager crypto on everything from sports to Taylor Swift’s romantic prospects. The legality of gambling on politics remains murky in the United States. Polymarket stopped offering its services to U.S.-based customers in 2022, after settling with the Commodity Futures Trading Commission for operating without registration.
The bets that bolstered Mr. Trump’s odds have raised alarms that Polymarket could be vulnerable to manipulation. The trader who placed the wagers might have been “willing to take the losses in order to change public perceptions,” said Rajiv Sethi, an economics professor at Barnard College. “And possibly have an effect on things like donations and morale and volunteer support and turnout.”
The frenzy over Polymarket’s election odds has also prompted suspicions that gamblers may be circumventing the ban on U.S. users. A former employee, who spoke on the condition of anonymity to discuss a sensitive topic, said it was “an open secret” that U.S. customers could make bets by using virtual private networks, which obscure an internet user’s true location.
But the attention has also fueled Polymarket’s business and set it apart from other prediction websites that offer betting markets on politics. The start-up, which is backed by an investment firm of the conservative tech mogul Peter Thiel, is close to completing a new $50 million financing round that would value it at $300 million, a person with knowledge of the matter said. In July, the election prognostication expert Nate Silver joined the company as an adviser.
Polymarket has “become a really significant factor” in the election, Mr. Sethi said.
A spokesman for Polymarket said the company used “industry-leading compliance measures” to prevent customers in the United States from betting. He also said that the company had investigated the Trump bets and that it had contacted the French gambler who placed them. The person was acting on “personal views of the election” and not trying to manipulate the market, the spokesman said.
Polymarket was founded in 2020 by Shayne Coplan, a New York University dropout who sometimes wears a Lego figurine of Steve Jobs around his neck. A vigorous networker, Mr. Coplan, 26, is a fixture on the crypto conference circuit and has built extensive contacts. At the company’s penthouse office in SoHo, he has told colleagues about his conversations with Adam Neumann, the WeWork founder, and the actor Orlando Bloom, two people familiar with the matter said.
In interviews on podcasts such as “Star Spangled Gamblers,” Mr. Coplan has argued that Polymarket could someday become a reliable source of news, offering “market-based journalism.” He often promotes the odds on his site as being more reliable than polls.
“It’s a more useful form of gambling,” said Nick Tomaino of the crypto firm 1confirmation, which has invested in Polymarket. “It’s actually producing information that is useful to people.”
Much of the site’s popularity stems from the potential for large payouts. While a rival political betting site, PredictIt, caps bets at $850, Polymarket allows users to gamble an unlimited amount of money.
In 2021, Polymarket came under regulatory scrutiny. The start-up was not registered with the Commodity Futures Trading Commission, which has tried to root out political gambling in the United States. Polymarket agreed to pay a $1.4 million fine to the commission and instituted so-called geo-blocking measures to prevent people in the United States from gambling on its site.
The site attracted mainstream attention this summer after its users correctly anticipated that President Biden would drop out of the presidential race. Mr. Coplan attended the Republican National Convention, where he was photographed socializing with Donald Trump Jr. He also hosted an event for Polymarket at the Democratic National Convention, and he posed with Gov. Tim Walz of Minnesota, the Democratic vice-presidential candidate, at a fund-raiser this week.
Recently, Mr. Coplan has become harder to reach. In September, he agreed to meet with The New York Times, before pulling out the week of the proposed meeting. The company spokesman said at the time that Polymarket faced “a very delicate environment” and that the online discourse around the firm was “red hot.”
For much of the fall, Polymarket’s odds suggested that Mr. Trump and Ms. Harris were locked in a tight race, mirroring the polls. Then the odds diverged substantially this month, after the four accounts placed large bets on the former president.
On Oct. 11, Mr. Trump posted a screenshot of Polymarket that showed he had a 55.5 percent chance of winning the election. On Monday, he posted a new screenshot showing that his chances had increased to 64 percent.
The surge of attention has made Polymarket vulnerable to bad actors, said Cristian Perez Ramirez, who worked at the company from 2021 to 2023. “People with enough motivation and enough capital can easily manipulate it,” he said.
Polymarket’s spokesman said the user who placed the election bets “has agreed not to open further accounts without notice.”
And the company’s investors rejected the concerns about manipulation, saying that it would take a lot of money to swing a market for a sustained period and that users would be motivated to place bets in the opposite direction if the odds were skewed.
“If you think the market has been manipulated, there is profit incentive to correct the price,” said Joey Krug, an investor at Founders Fund, the firm established by Mr. Thiel that has backed Polymarket.
In the coming weeks, Polymarket is poised to close a $50 million funding round led by the venture capital firm Blockchain Capital, a person with knowledge of the matter said. The company is considering creating its own cryptocurrency, and investors in the new financing would have the option of receiving some of those tokens, two people with knowledge of the start-up said. (Some funding details were reported earlier by The Information, and the spokesman said the company had no “immediate plans” to create a coin.)
Polymarket does not generate revenue, but it has discussed charging its customers fees, one of the people said. The company is also exploring ways to begin operating legally in the United States after a smaller competitor, Kalshi, won a lawsuit against the Commodity Futures Trading Commission in September.
For now, Mr. Coplan appears to be reveling in his company’s rising profile. This month, Mr. Musk, a vocal Trump supporter, posted a Polymarket chart on X. “Victory is not enough, it must be absolutely decisive victory,” he wrote.
Mr. Coplan reposted Mr. Musk’s message, with a note of wonder.
“Had to see it to believe it,” he wrote.
Kitty Bennett contributed research.
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