Millions bet on US midterm elections as political gambling booms

WASHINGTON: America’s political landscape is witnessing an unusual financial frenzy as millions of dollars are being wagered on the outcome of the November 3 midterm elections, turning congressional and gubernatorial races into major attractions for betting enthusiasts.

While betting on sporting events has long been popular worldwide, political contests are increasingly becoming another lucrative market. This time, traders and gamblers are placing substantial amounts on which party will control Congress, which candidates will win key Senate races and who will emerge victorious in gubernatorial elections.

One of the most prominent platforms attracting attention is Kalshi, a prediction market operating under the supervision of the US Commodity Futures Trading Commission (CFTC). Although its activities are commonly described as political betting, the platform categorises them as event contracts, allowing users to trade contracts based on the likelihood of specific outcomes.

According to the latest available figures, Kalshi’s broader election markets recorded approximately $454.2 million in trading volume over the previous 30 days. On October 31 alone, around $38.3 million was traded.

These figures cover multiple election-related markets and should not be interpreted as the total amount wagered exclusively on the November 3 US midterm elections.

Democrats favoured to take House control

The battle for control of the House of Representatives has attracted particularly heavy trading activity.

Kalshi recorded approximately $177.6 million in trading volume in its market concerning control of the House. At the time of the reported assessment, traders placed the probability of a Democratic takeover at around 93 per cent, compared with just seven per cent for Republicans.

The Senate control market also attracted significant attention, recording approximately $133.9 million in trading volume. Democratic control was assigned a 72 per cent probability, while Republicans stood at 28 per cent.

A separate Senate-related market recorded another $25.5 million in trading volume, representing a distinct market rather than an additional part of the same wager.

Texas Senate race attracts biggest attention

Among individual contests, the Texas Senate race has emerged as one of the most closely watched betting markets.

Democratic candidate James Talarico is challenging Republican Ken Paxton for the Senate seat, with approximately $68.5 million in trading volume recorded on their contest.

Traders gave Talarico a 69 per cent chance of winning, compared with 31 per cent for Paxton.

The figures have attracted particular interest because Texas has traditionally been a Republican stronghold. The difference between prediction-market estimates and conventional opinion polls has also become a subject of interest for political observers.

The Texas gubernatorial contest is generating separate activity. Republican incumbent Greg Abbott is facing Democratic candidate Gina Hinojosa, with traders assigning Abbott a 66 per cent chance of victory and Hinojosa 34 per cent.

Other Senate races draw millions

Beyond Texas, several competitive Senate contests are attracting substantial trading activity.

In Maine, approximately $16.5 million has been traded on the contest between Democratic candidate Troy Jackson and Republican Senator Susan Collins. Jackson was assigned a 69 per cent chance of victory, while Collins stood at 31 per cent.

Other closely watched Senate contests include Abdul El-Sayed versus Mike Rogers in Michigan, Sherrod Brown versus Jon Husted in Ohio, Josh Turek versus Ashley Hinson in Iowa, and Adam Hamilton versus Roger Marshall in Kansas.

Trading prices in these markets continue to fluctuate as new opinion polls emerge, candidates make campaign announcements and political developments influence expectations.

Governor elections also enter betting spotlight

The betting frenzy extends beyond congressional races, with gubernatorial elections in 36 states also attracting considerable interest.

In Ohio, the contest between Democratic candidate Amy Acton and Republican Vivek Ramaswamy recorded approximately $7.6 million in trading volume. Acton was assigned a 79 per cent probability of winning, compared with 21 per cent for Ramaswamy.

Florida’s gubernatorial contest between Republican Byron Donalds and Democrat David Jolly is another closely followed race. Elections in Georgia, Nevada, Kansas and other competitive states are also drawing attention from prediction-market traders.

How does political betting work on Kalshi?

The platform allows participants to purchase contracts based on whether a particular political outcome will happen.

For example, if a trader buys a contract predicting a candidate’s victory for 70 cents and that candidate wins, the contract pays $1. After accounting for the purchase price and applicable fees, the trader makes a profit.

However, if the prediction proves incorrect, the contract becomes worthless, resulting in the loss of the invested amount and applicable fees.

The prices of these contracts change continuously as traders respond to opinion polls, campaign developments, public statements and other political information.

Importantly, a 70 per cent probability displayed on the platform does not mean a candidate will receive 70 per cent of the popular vote. It represents the market’s estimated likelihood of a particular outcome at a given moment.

Similarly, a market recording $50 million in trading volume does not mean the entire amount has been placed on one candidate. The figure can include transactions on both sides and repeated buying and selling of contracts.

Political betting sparks debate

The growing popularity of prediction markets has triggered debate over their influence on democratic processes.

Supporters argue that these platforms combine information, public expectations and financial incentives to provide another indicator of electoral trends, sometimes reflecting developments that traditional opinion polls may overlook.

Critics, however, warn that allowing large financial interests to influence political prediction markets could create new concerns about transparency, market manipulation and the growing commercialisation of democratic processes.

As Americans cast their ballots on November 3, candidates will be fighting for political victories while traders watch the same results with millions of dollars at stake.

For some participants, election night could bring substantial financial rewards. For others, inaccurate predictions could mean losing their entire investment.

The outcome will determine not only the balance of political power in Washington but also the financial fortunes of thousands of people who have turned America’s midterm elections into a high-stakes prediction market.