Prediction market giant Polymarket is teaming up with Palantir Technologies to build an AI powered monitoring system aimed at protecting the integrity of its growing sports markets. The platform will use Vergence AI, developed through a partnership between Palantir and TWG AI, to flag suspicious activity such as manipulation, insider trading, or unusual betting patterns in real time.

According to Polymarket, the system will also screen prohibited users and produce compliance reports, tools the company says will help leagues and teams maintain trust as prediction based sports markets scale.

The move comes as competition in the sector heats up. Rival prediction market Kalshi has seen rapid growth, including more than $1 billion in trading volume on Super Bowl Sunday alone. Traditional betting companies are also entering the space, with DraftKings Predictions launching across 38 U.S. states, including several where standard sports betting is not legal.

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At the same time, the industry faces growing scrutiny in Washington. Senator Adam Schiff has introduced legislation that would ban prediction contracts tied to events like war, terrorism, or death, highlighting the regulatory debate surrounding the sector’s rapid expansion.