Prediction markets, which rose to prominence during the U.S. presidential campaign, began reflecting a likely Trump victory several weeks ago, even as opinion polls showed a close race.
Supporters of prediction markets such as Polymarket, Kalshi and PredictIt, where bettors could bet on the outcome of the election, claimed that odds reflected reality faster and better than opinion polls. With President-elect Donald J. Trump’s resounding victory, these claims appear to have come to fruition.
“History was made today,” Shayne Coplan, CEO of Polymarket, wrote on X, stating that “Trump campaign headquarters literally found out they were winning for Polymarket.”
Continues after advertising
It’s an important moment for betting markets, which have existed for years but have gained prominence in this election cycle. (One caveat: Such markets track the odds of a candidate winning implied by bets on their platforms, while polls measure how voters actually plan to act.)
Average odds from five political betting markets — Betfair, Kalshi, Polymarket, PredictIt and Smarkets — showed that Trump had odds better than a coin toss on the eve of Election Day, according to aggregator website Election Betting Odds. When the polls closed, the chances of a Trump victory soared.
Prediction markets began reflecting a likely Trump victory several weeks earlier, even as opinion polls showed the race very close. This occurred despite questions about possible manipulation, notably the emergence of a French trader who, for a time, monopolized the market for the Trump-friendly Polymarket contract.
Continues after advertising
“Surveys 0,” wrote Tarek Mansour, CEO of Kalshi, on X. “Prediction Markets 1.”
Others tried to get in on the action. Interactive Brokers and Robinhood have established their own political betting markets in the last month. And Wall Street is increasingly incorporating results from these platforms into its research.
Investor interest in the sector is also growing, with Polymarket working to close a $50 million fundraising round that would value the company at $300 million. (She is already backed by Peter Thiel’s Founders Fund.)
Continues after advertising
Prediction markets could become even bigger in future elections. A federal appeals court is hearing a challenge to the Commodity Futures Trading Commission’s efforts to block Kalshi from offering bets on U.S. elections.
c.2024 The New York Times Company
