As the United States heads into what could be one of its most contentious presidential elections in recent history, prediction markets are offering a glimpse into what many consider to be the public’s “bet” on the outcome. While polls are still a key component of political forecasting, the growing prominence of betting markets—such as Polymarket, PredictIt, and Kalshi—has given us a fascinating insight into how investors and ordinary people are placing their money on the election. As of now, many of these markets point to a likely victory for former President Donald Trump, despite polls showing a tight race with his Democratic opponent, Vice President Kamala Harris.
Prediction Markets and Their Impact on Election Forecasting
Prediction markets are an increasingly popular way to gauge public sentiment about elections, policy changes, and other major political events. These platforms, powered by participants’ wagers, essentially offer a snapshot of what the market believes is the most likely outcome. While they aren’t perfect—often skewed by the biases of the people placing bets—they are generally seen as a reflection of collective wisdom, with some arguing that they offer more accurate predictions than traditional polling.
The major players in this space are Polymarket, PredictIt, and Kalshi, each offering slightly different ways to place and track bets on the 2024 U.S. presidential election. According to recent data from these platforms, former President Trump holds a slight edge over Vice President Harris, though the gap between the two candidates has been narrowing in recent days.
Here’s a perfect example of the Futures Markets’ inaccurately predicting the election outcome.
On @Robinhood, Trump is the favored winner based on money but Harris has more actual bets to win. #ElectionDay pic.twitter.com/HrXZpz1AE4
— Eric "Irk" Jacobson (@GetIrked) November 5, 2024Trump Leading in Most Betting Markets
Polymarket: A Solid Lead for Trump
Polymarket, a cryptocurrency-based prediction market, remains one of the largest and most well-known platforms in the space. As of the latest data, it gives Donald Trump a 60% probability of winning the election. This marks a slight drop from the previous week, when Trump was pegged at a 67% chance of victory. The change in odds follows some favorable polling for Kamala Harris, including a surprising survey from Selzer polling in Iowa that indicated a potential shift in voter sentiment. Still, Polymarket’s market suggests that Trump continues to be the favorite.
Polymarket has some detractors who argue that its odds can be easily manipulated or influenced by a small group of large investors. Nevertheless, it remains a popular tool for those looking to track election trends.
PredictIt: A Narrow Edge for Harris
PredictIt, the oldest and most well-established prediction market, is showing a much closer race between Trump and Harris. As of Monday afternoon, PredictIt prices the election outcome as almost a dead heat, with Harris slightly ahead. According to the latest data, Harris has a 51% chance of winning, compared to 49% for Trump. PredictIt operates under stricter regulations than other platforms, with limits on the size of bets placed and the amount of capital a user can wager. This makes it a more constrained platform, but it also ensures that it operates within U.S. financial regulatory rules.
Kalshi: Shifting Odds
Kalshi, a New York-based regulated exchange, also shows Trump as the frontrunner, with a 56% chance of winning. This represents a notable shift from just a few days ago, when Kamala Harris momentarily led on the site following the release of the Selzer poll. While Kalshi’s data suggests a Trump victory is more likely, it also shows a significant amount of uncertainty in the market.
The Role of Polling Data vs. Betting Markets
While betting markets provide valuable insight into the mood of the electorate, they are not without their critics. Many experts argue that polling data, particularly when aggregated and analyzed by organizations like FiveThirtyEight, is still a more reliable predictor of electoral outcomes. According to FiveThirtyEight’s latest model, Kamala Harris holds a narrow edge over Trump, with a 50.2% chance of winning compared to Trump’s 49.9%. Nate Silver, the statistician behind FiveThirtyEight, has long argued that polling models tend to offer a more scientifically grounded perspective than betting markets.
However, the discrepancy between polling data and betting market odds is worth noting. Some believe that betting markets, with their real financial incentives, might offer more accurate predictions because bettors have skin in the game. In contrast, critics argue that certain biases within the betting pool—such as a possible pro-Trump demographic among bettors—could skew the odds in the former president’s favor.
The Trump vs. Harris Investment Portfolios
For investors tracking the election’s potential impact on stock markets, some have constructed portfolios designed to benefit from either a Trump or Harris victory. For example, analysts at Piper Sandler have created two distinct portfolios—one betting on Trump and one betting on Harris—based on their predictions of how the stock market might react to each candidate’s policies.
The “Trump portfolio” includes short positions in companies like Apple, which could be hurt by a trade war with China, and investments in oil and weapons industries that might benefit from a more hawkish stance on foreign policy. On the other hand, the “Harris portfolio” is heavily weighted toward renewable energy and electric vehicle manufacturers, industries that would likely benefit from Harris’ climate change policies.
These portfolios illustrate how election outcomes can have a broad impact on the economy and individual sectors, with investors eager to position themselves according to who they believe will win.
Other Platforms: Global Insights
In addition to U.S.-based platforms like PredictIt and Kalshi, international betting platforms like Betfair and Smarkets also provide useful insights, even though they are not available to American residents. These platforms currently favor Trump with a 60% chance of winning, similar to Polymarket, though their odds are slightly lower, with Smarkets showing a 58% chance of a Trump victory.
The odds in these international markets also provide a useful cross-reference for U.S. bettors and analysts, showcasing the global interest in the U.S. presidential race.
Are Betting Markets Reliable?
In the final hours leading up to Election Day, it’s clear that betting markets are leaning toward a Trump victory. However, the odds remain close, and the outcome is still uncertain, especially given the unpredictable nature of recent polling data. As always, there’s no single reliable method for predicting election outcomes, and the contrast between polling data and betting odds only adds to the complexity of forecasting.
For now, investors, political analysts, and everyday citizens will continue to track the movements in these markets, aware that they may offer a glimpse into the future, but not a guaranteed prediction. What is certain is that these platforms will continue to play an important role in how people think about the election, providing a real-time pulse on the political landscape.
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