For Lightning, that would be both liquidity and security (e.g. the election bet on Poly was the size of 9+ entire Lightning Networks).

For on-chain, the problem is how to handle the actual contracts and uncheatable/uncensorable payouts to thousands of addresses. For that to be decentralized you need more contract logic than bitcoin script provides. Likely a good idea to wait for a production-ready off-chain smart contract platform (based on whatever ZK proofs/rollups/etc.) to arrive. Or bite the lemon and deploy Poly contracts to RSK. 😅