Election Betting Is Taking Off. Here's Why the Odds Deserve a Closer Look

Prediction markets have gone from a niche corner of the internet to a regular feature on financial news. Platforms like Kalshi and Polymarket let people trade contracts on real-world events, with prices reflecting the market's implied probability of an outcome.

Billions of dollars are changing hands, but some of the election odds making headlines can be moved with just a few thousand dollars. That's becoming harder to ignore as the 2026 midterms approach.

From niche bets to mainstream markets

Business has taken off. Combined monthly trading volume across Kalshi and Polymarket reached $64.9B in September 2026, up from $4.7B in November 2024. Sports contracts have driven most of that growth, although political markets are attracting plenty of attention.

Politics still accounts for a relatively small share of trading. Polymarket has averaged roughly $2B in monthly political volume this year, compared with less than $300M on Kalshi, with political contracts representing only a fraction of the platforms' overall activity.

Much of this became possible in 2024, when Kalshi won a federal court battle against the Commodity Futures Trading Commission. The decision allowed it to list congressional election contracts just a month before Americans headed to the polls.

Midterm betting enters a new era

That ruling helped pave the way for this year's surge in election betting. Traders have already put more than $220M into contracts tied to the 2026 congressional elections, compared with $92M throughout the entire 2024 cycle.

People are also betting on different outcomes. Just 16% of this cycle's markets focus on who wins a race, down from 71% in 2024. Instead, 58% center on the margin of victory.

But the money isn't spread evenly across traders. The top 1% of Polymarket wallets by congressional trading volume account for 70% of all congressional betting this cycle.

When betting odds become headlines

Those odds are reaching people who have never placed a bet. Kalshi has partnerships with CBS News, CNN, CNBC, and Fox News, with CNN even airing a segment built around its market data. Polymarket has secured deals with Google Finance, Substack, and Dow Jones.

Kalshi estimates that people browsing its midterm markets outnumber actual traders five to one. So even when relatively few people are putting money behind an outcome, the resulting probabilities can reach a much larger audience.

Whether those numbers are actually better than polls is another question. A Vanderbilt University analysis found that Polymarket outperformed polling in the 2024 presidential election. An earlier Columbia and Temple study, however, concluded that prediction markets largely follow polls rather than offer independent forecasts.

How easily the odds can move

The concern becomes clearer when you look at how little trading activity sits behind many of these prices. A watchdog review of more than 21K midterm markets found that 76% had less than $1K in volume. Just 10 wallets account for 17% of Polymarket's congressional trading volume.

That makes some markets surprisingly easy to move. A $3.5K bet, equal to the federal cap on an individual campaign contribution, could shift prices by at least five cents in 97% of midterm markets.

Kalshi has started flagging midterm markets with less than $10K in volume. It also fined three candidates earlier this year for betting on their own races, banning one for five years.

The potential impact is already visible in California. On the morning San Jose Mayor Matt Mahan entered the governor's race, one Polymarket account spent $44K on contracts tied to his candidacy. His odds climbed to 36%, even though polls put him near 4%.

What it means for voters

These price swings matter because election odds can influence how people judge a candidate's chances. In a survey of 1.99K registered voters conducted on Sept. 21, respondents were 20 percentage points more likely to identify a candidate as the likely winner when shown 84% Kalshi odds rather than 50%.

Interestingly, that influence doesn't necessarily translate into trust. Only 19% of respondents considered election prediction markets accurate, compared with 37% who said the same about polls.

The platforms have legal problems to deal with, too. Roughly 20 states are challenging their operations in court, arguing that they function as sportsbooks, while federal judges have reached conflicting conclusions. Minnesota passed a ban this year, although a federal judge blocked it before it took effect.

With election odds appearing across major news outlets, more people are likely to encounter these numbers whether they trade or not. But a 70% probability backed by a handful of bets is a very different proposition from one supported by millions in trading. Before taking the odds at face value, it's worth checking how much money is actually behind them.