Brennan Center study finds prediction market odds sway voters' election expectations

Research from the Brennan Center for Justice indicates that the betting odds shown on prediction markets shape how voters expect elections to turn out. Participants in the experiment looked at pairs of made-up congressional contests and had to say who they thought would win. For every candidate they saw a win probability taken either from NBC News polling or from the prediction market platform Kalshi. Researchers changed those polling numbers and market odds at random, which let them see how people responded when the two sources pointed in different directions.

Higher market odds translated into a stronger perception that a candidate would win. A contender at 67% on Kalshi drew 10% more selections as the likely winner than one sitting at 50%. Raising a candidate's odds to 84% pushed the perceived likelihood of victory up by 20%. The researchers also tested whether cautioning voters about prediction markets' shortcomings would help, and found that it did not: people kept leaning on market odds when judging who would win elections.

Skepticism toward prediction markets does not appear to protect voters from their pull, according to the Brennan Center's figures. Just 19% of voters rated election prediction markets accurate, while 37% said the same about traditional polls. On whether these markets reflect public opinion accurately, 29% agreed, compared with 55% for conventional election polling. On regulation, about 48% of study participants backed tighter rules for prediction markets, 23% wanted certain kinds banned outright and 16% said every type should be prohibited.

The Brennan Center for Justice argues that the findings suggest more stringent regulation of prediction markets may be necessary. The study was reported after several US states moved to regulate the sector: the Ohio Casino Control Commission has issued cease-and-desist notices to Kalshi, Polymarket and other companies, and Ohio is preparing legal actions against Kalshi and Polymarket.