Prediction market settlement rules decide whether a trade pays. They also decide whether a clean-looking arbitrage is real or fake. Two markets can sound identical in a headline and still resolve differently because of deadlines, data sources, definitions, cancellation rules, or platform-specific judgment.
This matters most when comparing Kalshi and Polymarket. A price gap between two similar contracts is only arbitrage if both contracts settle the same way. If one market uses a different source or deadline, the gap is a directional bet with extra legal and operational risk.
Why settlement rules matter more than headlines
Headlines compress nuance. Contracts do not. Before trading, read the exact question, market rules, close time, resolution source, and any edge-case language. Small wording differences can change the payout.
- Different deadlines: one market may settle by announcement date, another by effective date.
- Different sources: one contract may require an official government source while another accepts a platform-defined oracle.
- Different definitions: passing, signing, implementation, and announcement can mean different things.
- Different cancellation rules: one venue may void a market while another resolves No.
- Different jurisdiction rules: platform access and eligibility can affect whether a trade is usable.
Kalshi vs Polymarket resolution differences
Kalshi markets are regulated event contracts with defined settlement procedures. Polymarket markets often rely on market-specific resolution criteria and oracle-style processes. Both can be useful, but the rules may not match even when the event theme is the same.
That is why a Kalshi and Polymarket price gap needs a contract-by-contract check. If the Kalshi market asks whether an official source publishes a result by a date and the Polymarket market asks whether a broader event happens by a different date, the gap is not guaranteed arbitrage.
Fake arbitrage on Polymarket and Kalshi
Fake arbitrage appears when traders compare two prices without comparing two rulebooks. A scanner can surface candidate gaps, but the trader still has to verify that both legs are actually equivalent.
Common fake-arb patterns include similar political markets with different date cutoffs, crypto bills where one market resolves on passage and another on signature, sports props that use different official data sources, and macro contracts that use different release revisions.
Resolution dispute checklist
- Copy the exact contract wording. Do not rely on the title alone.
- Identify the settlement source. Government release, exchange rule, league source, oracle, or platform decision.
- Check the deadline. Time zone and date language matter.
- List edge cases. Delays, revisions, cancellations, recounts, withdrawals, and appeals can change results.
- Compare both legs. For arbitrage, both markets must resolve opposite sides from the same underlying event.
Use Alphascope for the first pass, then verify
Alphascope's arbitrage scanner helps find candidate gaps between Polymarket and Kalshi. Use it to avoid manual scanning, then open each market and verify the settlement rules before treating the gap as actionable.
For broader context, use live odds, market-moving news, and AI forecasts to understand whether a price difference comes from real disagreement, stale liquidity, or different contract wording.
FAQ
What is fake arbitrage on prediction markets?
Fake arbitrage is a price gap that looks risk-free but is not, usually because the two contracts resolve under different rules or one side cannot be filled at the displayed price.
Do Kalshi and Polymarket always resolve similar markets the same way?
No. Similar market titles can use different deadlines, sources, and definitions. Always compare the full contract rules.
What causes Polymarket resolution disputes?
Disputes often come from ambiguous wording, conflicting sources, timing questions, or edge cases that were not obvious when the market was created.
How do I avoid fake arbitrage?
Check settlement source, deadline, wording, liquidity, fees, and fill risk on both legs before assuming a spread is guaranteed.