Betting on the 2024 US presidential election has become a booming industry, with more than $1.2 billion already wagered on one platform alone, Polymarket. After the recent legal ruling, it’s now easier than before for Americans to bet on political outcomes, giving rise to a new trend in election analysis.
Rise of political betting markets
Betting on elections is not new, but the sheer scale and popularity of political betting in the 2024 election cycle have taken many by surprise. Polymarket, which is an online exchange where people can bet on political events using cryptocurrency, has seen unprecedented increase in activity, with two mystery bettors reportedly wagering millions on a Trump victory.
A legal breakthrough that came earlier this month has further fuelled this trend. A federal appeals court ruled in early October that prediction market Kalshi could offer contracts on US elections, at least for now. Within a week of this decision, over $3 million in political contracts had been traded. This ruling has opened the door to more political betting, although the Commodity Futures Trading Commission (CFTC) continues to argue that such markets violate commodities law, and an appeal is set for December.
According to Dr Grant Ferguson from Texas Christian University, political betting markets react in real-time to events, which allows them to capture shifts in public opinion that may take days to appear in polls.
“People who bet in these markets can incorporate a lot more information than just polling,” Ferguson said, pointing out that markets have a strong track record of predicting political surprises, such as Donald Trump’s unexpected win in 2016. Betting markets like Polymarket are bullish on Trump’s chances, despite Joe Biden currently leading in many polls.
Betting from abroad
Betting on elections remains prohibited within the United States, platforms like Polymarket have attracted a global user base. Interestingly, much of the action in these markets is happening outside the US. Eva, a software developer from the Netherlands, said she has been betting on US elections since 2020, driven by the profitability of political betting.
“I think if more people put their money where their mouths were when it comes to politics, we’d probably be living in a more realistic and less partisan world,” Eva said. She views political betting as a way to think more clearly about election outcomes, focusing on probabilities rather than partisan loyalties.
Similarly, a Bulgarian political analyst based in Germany recently placed a €150 bet on Vice President Kamala Harris, believing Trump’s extreme positions make him unlikely to win. “It is largely like casinos where the house has the edge, and most people end up losing in the long run,” he said.
Despite its growing popularity, political betting remains controversial. Last year, Democratic senators, including Elizabeth Warren, raised concerns that these markets could distort democracy.
There are also worries about insider trading and market manipulation, with critics arguing that these platforms could be used to spread false information or influence voter behaviour.
Future of election betting
As election day approches, the debate around political betting is only likely to intensify. While platforms like Polymarket have changed the way people engage with politics, they have also raised important questions about the role of money in elections.
With legal challenges looming around, the future of these markets remains uncertain. The next few months will reveal whether betting markets can continue to grow or if regulators will put a stop to the action.
Whatever the outcome, one thing is clear that the betting on the 2024 US election has already changed the way people think about political campaigns and it is bringing a new dimension to the race for the White House.
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