In the United States, the Sports Betting Market has exploded. No longer is sports betting an industry that exists below the consciousness of the average viewer. Ads from online Sportsbooks like Fanduel and DraftKings advertise during major sporting events. ESPN now displays betting lines during its broadcasts, meaning that being unaware of sports betting is nearly impossible for the public. For better or worse, major US sports leagues like the NFL, NBA, and NCAA have become integrated with the gambling industry.

In the heat of an election year, gambling markets are becoming more intertwined with politics. While gambling on US elections has historically been a legal gray area, only available through shady overseas markets, and is less visible to the general public than sports betting, a recent court decision has allowed election betting to resume on the American platform Kalshi. Kalshi is the largest election trading platform officially available to Americans and is based in the US. The court's decision to allow them to host election markets means that ads for election markets will soon bombard Americans. A recent Kalshi TV spot promotes US election betting with the phrase, “You can trade on that.” Critics of election gambling believe allowing bettors to place big money on election results could incentivize election interference. Despite these concerns, there is no way for the US Government to completely regulate these markets, as evidenced by American bettors having many options to get their money down on elections through legally unstable offshore markets, and the stakes are only increasing.

The largest of these markets is Polymarket, which accepts cryptocurrency bets on user-created markets, allowing users to purchase shares on different outcomes. While they offer markets in Sports, Business, Pop Culture, and Cryptocurrency, their largest market is on the winner of the 2024 election, with more than 1 billion dollars in trading value placed. This is by far the largest election market out of all platforms.

While the vast majority of the American public will not place any money on the results of this year’s presidential election, many have looked towards betting markets to understand who is winning the race. Polymarket now offers an election tab on its website, which shows an election forecast based on its markets. Followers of these markets would argue that the sheer number of people participating in these markets and looking to find an edge in the odds causes increased accuracy in the predictions.

Other methods of election predictions include polls, forecasts, historians who claim to have perfect prediction systems, and a Pennsylvania bakery that sells cookies designed for both candidates. Followers of most of these methods are probably placing money on the election, which causes predicted results on the Betting Markets to be influenced by many different approaches.

The relative accuracy of Polymarket, in particular, has been questioned following a recent increase in Trump’s predicted odds based on the percentage of bets he has received. On October 5th, money was placed evenly between both candidates. As of October 17th, the amount of money placed on Trump has surged to 62% of bets, compared to Harris’s 38%. This suggests that a major event has occurred in the race's momentum, although none of the other models or prediction markets have picked up on as high of a Trump surge. A similar trend has also occurred on Kalshi, where both candidates were tied on the 5th, with Trump peaking at 58% on the 19th. This surge coincides with the promotion of these markets by both Elon Musk and Donald Trump, who pointed to earlier trends in Trump’s favor as evidence of a Trump lead. Either these bettors have a secret edge suggesting a Trump victory or are buying into the hype from Trump and his allies. It is most likely the latter.

That is not to say that Trump doesn’t have an edge on Harris, but there is a strong argument that these markets are influenced by low-information bettors, who are following the advice of Trump, Musk, and other right-wing media figures. On Polymarket, the only election market not to cap individual shares, the highest shareholder for the “Yes” position on a Trump victory currently holds more than 15 million shares. In comparison, Harris’s highest shareholder is just slightly over 4.5 million shares. Tarek Mansour, the founder of Kalshi, has argued that his platform’s predictions are still reliable, saying, “Prediction markets are the new source of truth, free from bias.”

Betting markets may have been a stronger tool in past elections or just a few months ago. Still, the influx of low-information bettors has ruined their ability to give any election insights that polling data and modeling cannot unless you believe there is a mysterious mid-October surprise that only gambling Trump fans have picked up on. If betting markets tell us anything, it is that Americans are anxious for any information on the election’s results that they are willing to place large amounts of US Dollars or Cryptocurrency on an outcome to convince themselves that they are in the know when they would likely be better off trusting the results of a coin flip.