US election prediction markets exceed $1.4bn in trading

Trading in prediction markets linked to the 2026 US midterm elections has passed $1.4bn, according to a CNN analysis cited in a media report. Kalshi, the largest US prediction market operator, accounts for nearly $1.1bn of that volume, covering election outcomes, voter turnout, endorsements, debates and campaign statements. Polymarket has recorded more than $340m across its US and offshore platforms.

Interactive Brokers' ForecastEx has produced over $6.4m in volume, and Smarkets, which is based in the UK, has logged roughly $200,000 from British customers. Volume, as the report defines it, counts the full value of contracts that change hands before a market closes, not just the sums staked at the outset.

According to industry analyst Dustin Gouker, election betting is still far below the level seen in sports and cryptocurrency markets, yet it still reveals what the public expects. On Election Day he anticipates a steep rise in activity as professional bettors react to shifting probabilities. The report adds that the majority of individual participants in these markets end up losing money.

Court rulings permitting election-related contracts under federal law paved the way for this growth. PredictIt was challenged by the Biden administration, which tried in 2024 to limit election markets, yet the company won in court. Under the Trump administration, regulators have taken a friendlier stance and are completing rules that shield election markets. Smarkets is pursuing permission to operate in the US, and other firms are jockeying for position before the 2028 presidential race.

Even so, political figures are pushing back, asking whether these platforms should be classed as financial exchanges or as gambling operations. Regulators at the federal level have committed to tackling insider trading, and Kalshi has barred six 2026 candidates who wagered on their own contests.

These markets drew wide attention in the 2024 presidential race, calling Donald Trump's win sooner than conventional polls, which had mostly portrayed the race as tight. Kalshi CEO Tarek Mansour called the 2026 midterms a test of market-based political forecasting, contending that prices pool information from many participants. Ties to political and financial circles have also grown, including Donald Trump Jr. in an adviser role.

John Phillips, chief executive of PredictIt operator Aristotle, conceded what is at stake, saying "credibility is always on the line." After Brazilian President Luiz Inácio Lula da Silva won on Sunday, traders who had given him roughly a 20% chance were caught out, and Kalshi spokesperson Elisabeth Diana defended the market's odds: "If 20% candidates never won, the markets would be broken." Republican pollster Brent Buchanan doubted markets could take the place of voter surveys, stressing that polling depends on statistical methods and direct interviews with voters.

The trading figures were reported by CNN, which partners with Kalshi and draws on its data for news coverage, though its editorial staff may not trade on prediction markets. Whether prediction markets become a recognised tool for political forecasting may hinge on the November elections, especially since market odds and opinion polls both point to possible Democratic gains in Congress. Should those expectations turn out wrong, the report notes, the industry's credibility could be damaged.