Prediction market platforms reinforced their status as election forecasting tools on Tuesday night, accurately calling a wave of congressional races before polls closed and, in many cases, projecting outcomes ahead of traditional news outlets.
Traders treated Democrats as favorites to flip both the House of Representatives and the Senate even before the first polls closed at 6 p.m. Eastern time. Markets saw the party as a narrow favorite to claim at least 53 Senate seats, with a 54th rated as a toss-up.
By Wednesday, Democrats had secured 54 Senate seats, including wins in Iowa, where prediction markets had set the odds at 50-50, and in South Carolina, where Republicans had been narrow favorites. Results remained outstanding in Mississippi and Alaska, where markets gave Democrats Scott Colom and Mary Peltola 90% odds of winning.
Leading platforms spent Tuesday night posting race projections on X, at times beating outlets including CNN, Fox News and the Associated Press, and occasionally calling contests before a substantial number of votes had been counted. Jack Such, a spokesperson for Kalshi, said the platform was comfortable making calls once a candidate's odds climbed above 99% and trading on the opponent had “dried out.”
Polymarket said that across 10 key races it projected winners a median of 31 minutes before those major outlets. “It's now routinely hours between when prediction markets call it versus the TV networks,” chief executive Shayne Coplan wrote on X. “No knock to them, but now there's Polymarket, and many people are realizing they want to know what's happening in real time.”
Even where markets briefly favored the eventual loser, they adjusted quickly as votes came in. In South Carolina, Democrat Annie Andrews became the favorite on Kalshi shortly after 7:30 p.m., only 30 minutes after polls closed. In Texas, where Democratic state Rep. Gina Hinojosa ousted Republican Gov. Greg Abbott, Hinojosa's odds on Polymarket jumped from 39% to 73% within five minutes of the first poll closings.
“You now have financially motivated number crunchers doing this, around the world, that give you that signal just that much faster,” said Flip Pidot, a member of the board of directors at the Coalition for Political Forecasting.
Not everyone was convinced the night settled the debate. Michelle Kendler-Kretsch, a researcher at the nonprofit Anti-Corruption Data Collective, said one accurate election should not blunt efforts to regulate the platforms more tightly, citing a recent Reuters/Ipsos survey that found most Americans oppose trading on elections. “Risks and vulnerabilities didn't change overnight just because the markets were accurate this time around,” she said.
The platforms have missed before. Right before the midterms, forecasts failed on Brazil's presidential race, where Luiz Inácio Lula da Silva held only about 20% odds on Kalshi before polls closed, and on high-profile Democratic primaries in Wisconsin and Michigan over the summer, where progressives drew extremely high odds. Michigan's Abdul El-Sayed narrowly won his primary regardless. Rajiv Sethi, an economics professor at Barnard College, said long-shot wins do not make markets wrong: “If you toss two coins, there's a 25% chance that you'll throw two heads in a row, and nobody would be terribly surprised if you did.”
Eric Zitzewitz, an economics professor at Dartmouth College, said it remains unclear whether casual observers understand market probabilities, noting that newcomers may read 55 to 45 odds as a runaway lead. He expects public understanding to improve as the platforms gain traction. Harry Crane, a statistics professor at Rutgers University, said that in 2024 prediction markets were part of the conversation but “a little bit unsure,” adding: “This [was] the first true prediction markets election.” Experts said the platforms are likely to remain a fixture through the next presidential race.
