Traders have wagered more than $1.4 billion on U.S. midterm legislative races, a record-breaking sum that places platforms like Kalshi and Polymarket under intense scrutiny from lawmakers, ethics experts, and researchers.
Kalshi CEO Tarek Mansour called the midterms the prediction market election.
These platforms have now established data-sharing partnerships with major media organizations to display betting odds alongside traditional election reporting.
Trading Volumes Reach Record Highs
Kalshi reported $1.33 billion in trading volume across all midterm bets on the eve of the election. By comparison, about $145 million was wagered on Polymarket’s congressional markets, according to the Anti-Corruption Data Collective (ACDC), as noted by Astroawani.
Prediction Markets Miss International Election Outcomes
Prediction markets signaled Donald Trump’s victory in 2024 when polls projected a toss-up. However, recent international contests exposed forecasting vulnerabilities.
In Brazil’s presidential runoff, markets priced a victory for incumbent challenger Flávio Bolsonaro at roughly 80 percent on election day—even reaching 84 percent on the eve of the vote—before Luiz Inácio Lula da Silva won with 51.8 percent of the vote, as detailed by The Guardian. Similar misses occurred in Serbia’s parliamentary election and a Wisconsin Democratic primary.
Joshua Clinton, a professor of political science at Vanderbilt who led research on the 2025 paper, stated that while academic studies find markets well calibrated at scale, how accurate the price is for any specific market is impossible to know,
as reported by Astroawani.
Regulators Question Market Integrity
Senators Elizabeth Warren and John Curtis sent a joint letter to Kalshi and Polymarket expressing alarm over election-related event contracts being treated as indicators of political momentum, according to Yahoo Finance. In Utah, a lawsuit brought by Kalshi is challenging whether federal rules preempt state anti-gambling laws, drawing an amicus brief from Better Markets warning against the expansion of sports-betting harms.
Many midterm markets examined across Polymarket, Polymarket US, and Kalshi were thinly traded and concentrated in high-profile competitive contests, said David Szakonyi, co-founder of ACDC, as reported by CBC. The vulnerability there is that in many of these markets, there actually aren’t that many people who are betting,
Szakonyi said. Basically anybody can spend $100 or $1,000 and shift the odds on a public-facing website and create the impression that a candidate is doing better or worse in reality.
Kalshi blocks politicians and campaign workers from placing wagers, while platforms have issued warnings against spreading unverified claims that election results have been compromised. Financial stakes incentivize the creation of online rumors, making misrepresentation a challenge for election administrators, according to Rachel Moran, a senior research scientist at the University of Washington’s Center for an Informed Public, as noted by Kuwaittimes.
Earlier coverage: Polymarket Investigates Suspicious Bets on Netanyahu and Likud Party