- Prediction markets and pollsters both say Democrats are favored to take both the US House and Senate in the midterms, although markets show slightly lower odds for Senate control, with a gap averaging about 7.3 percentage points since Sept. 1.
- By Tuesday morning, the gap narrowed to 2.9 percentage points, with markets giving Democrats a 77.3% chance of taking the Senate compared to 80.2% from polls.
- For the House, markets give Democrats a 94% chance of flipping the chamber, while polls indicate 96.2%, resulting in a 2.2 percentage point gap on Tuesday.
- Kalshi reported $1.33 billion in midterm bets, with the total on these markets exceeding $1.48 billion on Tuesday.
- In October, over $21 billion was traded on prediction markets, marking a monthly record.
- Prediction markets face a pivotal test as results come in, with analysts warning of reputational harm if odds diverge sharply from outcomes.
Prediction markets are facing their biggest test yet as over $1.48 billion is wagered on the US midterm elections, with Democrats favored to win both chambers.1267
Kalshi and Polymarket show a 94% chance for Democrats in the House and a 77.3% chance in the Senate.34
The gap in Senate odds has narrowed to 2.9 percentage points, while the House shows a 2.2-percentage-point gap.
Analysts warn that if results diverge sharply from these predictions, the industry's reputation could suffer.
Yesha Yadav, associate dean at Vanderbilt University Law School, stated, "Tuesday does, in fact, represent a real test for the new wave of prediction markets."
The stakes are high, as these platforms have gained prominence by often contradicting traditional polls, especially in the lead-up to the 2024 presidential election.
Kalshi reported $1.33 billion in trading volume across all midterm bets, while Polymarket saw about $145 million wagered on congressional markets.
As the midterms approach, the accuracy of these markets will be scrutinized, especially given their growing integration into media coverage.
“Traders have wagered more than $1.48 billion on Tuesday's midterms, with Kalshi alone reporting $1.33 billion in volume. The gap between market odds and polls for Senate control narrowed to 2.9 points, down from a 7.3-point average since September.”
Yahoo FinanceThe Guardian
