[Pricing Bias Exists on Polymarket, Arbitrageurs Profited Over $40 Million in One Year] According to Decrypt, a new academic paper reveals systemic pricing bias on the prediction market platform Polymarket, where arbitrageurs profited over $40 million in one year. The paper, titled 'Untangling Probability Forests: Arbitrage Opportunities in Prediction Markets,' analyzed data from April 2024 to April 2025 and identified pricing errors in over 7,000 markets. The study highlights two main arbitrage patterns: first, the sum of 'Yes/No' share prices within the same market deviating from the theoretical value of $1; second, probability inconsistencies in logically related markets (e.g., 'Trump Wins' and 'Republican Wins'). By simultaneously buying and selling correlated contracts, traders can achieve risk-free profits. Although arbitrage activity eventually drives market prices back to efficiency, the research indicates that pricing biases can persist for several hours. This phenomenon is not limited to Polymarket but is also observed on regulated platforms like Kalshi.