The billion-dollar bets on Prediction Markets that are reshaping American elections

For the first time in almost 100 years, Americans can legally place bets on who will win elections.

Betting websites now let people buy and sell contracts based on whether certain politicians will win or lose. People who support them say they do a better job of figuring out what will actually happen than old-fashioned polls.

Zachary Peskowitz, the Masse-Martin NEH professor of political science at Emory University, explained that these websites give clearer odds than regular surveys.

“So, for example, you can interpret a prediction market more or less as saying there’s an 80% chance that a given candidate wins the election,” he said. “This is an information source that the media and individual citizens will use. Prediction markets and their increased prominence are likely to affect American politics in a variety of ways.”

These betting platforms are already changing the way political campaigns operate. Recently, many people placed bets on the race in Georgia’s 14th Congressional District.

They were not only predicting the winner, but also measuring how much influence Donald Trump still holds within the Republican Party.

The runoff election gained nationwide attention because of Trump’s endorsement and because platforms like Kalshi and Polymarket have become part of how Americans track politics.

In Kentucky, some candidates are even monitoring the odds betting markets give them during primary elections.

According to Andra Gillespie, these betting services function successfully because individuals are more honest when they place money on what they believe will happen rather than simply stating who they hope would win.

The betting markets appear to pick up on political circumstances that do not receive as much attention, such as when politicians remain in government because no one else is willing to take over.

Concerns about Prediction markets

However, there is a downside. People are concerned that as these sites acquire popularity, they will influence voter behavior rather than simply anticipate it.

Peskowitz warned that seeing negative prospects for your candidate may lead you to give up.

The growing popularity of political betting has sparked legal and ethical problems.

Earlier this year, Kalshi prohibited lawmakers, campaign workers, and some government employees from betting on US elections because of concerns about potential conflicts of interest.

Meanwhile, Polymarket has been accused of insider trading and suspicious betting relating to President Trump’s legal difficulties and political prospects.

According to reports, the platform has processed more than 413 million bets, with over $100 million currently linked to political races and election results.

These scandals have raised concerns that political betting markets may be rigged, particularly if insiders utilize private information to profit from election-related events.

“There is a possibility that there can be corruption or that this could be used for corrupt purposes,” said Gillespie.

She pointed out that betting sites can’t replace regular polls because they don’t explain why people vote the way they do.

“As a social scientist, I’m not just interested in who are you gonna vote for, but I’m also interested in why you’re voting in a particular election,” Gillespie said.

Legal uncertainty remains

The rules for political betting are still being worked out.

Georgia currently does not allow legal sports gambling, despite the fact that prediction markets continue to operate in a murky area across the country.

According to Peskowitz, disputes between states, betting corporations, and federal organizations such as the CFTC will most likely determine the future of political betting.

For the time being, observers believe the runoff in Georgia’s 14th District will reveal two things: if Trump still wields significant political power, and how important betting markets will be in future elections.

The next steps taken by voters, campaigns, and regulators will determine whether these sites benefit or harm democracy.

“I think it’s too early for us to tell,” Gillespie said. “Political junkies might be paying attention to it, but I’m not sure that most people are paying attention to this in their everyday lives.”