Prediction markets traded millions on midterm results

Millions traded as results came in

Trading activity surged on prediction markets as midterm results from Indiana began rolling in before seven p.m. on November third. Market prices shifted toward Democrats as the night progressed.

Abbott race saw big bets despite loss

At least one million dollars was traded on Kalshi betting that incumbent Texas Governor Greg Abbott would be reelected. Abbott lost to Democrat Gina Hinojosa by more than seven hundred thousand votes.

Markets predicted most races correctly

More than eighty-seven percent of all election markets across Kalshi and Polymarket gave the right candidate at least a ninety percent chance of winning their race twenty-four hours before election night.

Markets did not beat traditional polls

Koleman Strumpf, a professor of economics at Wake Forest University, said prediction markets did pretty well but did not outperform the best traditional forecast polls that tracked results that night.

“I'd say prediction markets did pretty well. But they didn't outperform the best.”

Silver disputes markets' credit claim

Nate Silver, a political forecaster, disputed claims by Polymarket and Kalshi leaders that markets predicted races. Silver wrote that prediction market probabilities converged toward his models rather than independently predicting outcomes.

“Prediction market probabilities strongly converged toward [our models] in individual Senate and gubernatorial races.”

Schiff criticizes CFTC over sports betting

Three days after the midterms, Senator Adam Schiff criticized the Commodity Futures Trading Commission for allowing sports contracts on prediction markets, saying it violates state law and Tribal sovereignty.

“Sports prediction markets are sports bets. By effectively requiring prediction markets to offer contracts in all fifty states, even on Tribal lands, the CFTC is once again violating state law and Tribal sovereignty.”