Election contracts in the U.S. gained legality shortly before the 2024 presidential vote, providing platforms like Kalshi more time to prepare for upcoming cycles. Combined monthly trading volume on Kalshi and Polymarket rose from $26 billion in May to $53 billion in July, driven largely by sports betting.
Political event contracts represent a smaller segment, with monthly volumes averaging $2 billion on Polymarket and under $300 million on Kalshi. By July, over $30 million had been traded specifically on the outcomes of House and Senate races.
The Commodity Futures Trading Commission previously restricted Kalshi from listing congressional control contracts, citing concerns over gaming. However, the regulator withdrew a restrictive proposal in February and published a new framework in June that excludes elections from the gaming category.
Research by the Anti-Corruption Data Collective indicates that a $3,500 bet can shift 97% of midterm-related markets by at least five cents. Meanwhile, a Morgan Stanley analysis of 72 million Kalshi trades suggests that market prices closely track actual election outcomes.
The upcoming NEXTPredict summit in New York, scheduled for October 22 and 23, expects 2,500 attendees. The event will feature discussions on the reliability of prediction markets compared to traditional polling models, with participation from financial institutions and media representatives.
