How prediction markets have spread to politics
Putting your money where your mouth is has never been easier, as it is now possible to gamble on basically anything, including election outcomes. However, many experts worry that gamifying politics could compromise its integrity and manipulate how issues and candidates are represented in the media.
What are prediction markets?
Prediction markets are like the stock market, but “instead of buying shares in companies, you buy shares in the outcomes of real-world events,” said Vox. The top prediction market apps today are Kalshi and Polymarket, and they “allow you to stake money on everything from the outcomes of elections and wars to the weather in your city tomorrow to who will win the Grammy for Album of the Year.” The apps essentially “transform any future scenario, regardless of how glib or disturbing, into a profitable wager,” said NPR.
Under the Biden administration, there was an “aggressive clampdown” on these prediction market apps to the point that Polymarket was “forced to cease its U.S. operations in 2022 and its chief executive had his home raided by the FBI last year,” said NPR. However, the prediction market is once again “taking flight with the full blessing of the White House.” The industry skyrocketed in 2025 and brought in $10 billion combined in bets on Kalshi and Polymarket in November.
The prediction market really took off once the federal ban on sports betting was struck down by the Supreme Court in 2018. Now, the gambling industry is “ingrained in U.S. sports culture with leagues, franchises, players and networks now partnering with betting organizations,” like the sportsbooks DraftKings and FanDuel, said CNN. Betting on professional and college sports also accounts for most of the bets placed on Kalshi.
On the flip side, DraftKings and FanDuel have both announced plans to launch their own prediction market services. “Sports have been a big driver thus far. We think sports are kind of a gateway,” said Devin Ryan, the director of financial-technology research at Citizens, to MarketWatch. “This will be about much more than just sports.”
How will they affect politics?
The biggest concern is the increasing influence of gambling on politics. President Donald Trump dropped the Biden administration campaign to outlaw betting on elections, and both Kalshi and Polymarket have added Donald Trump, Jr. as an adviser to the companies.
In 2024, a win in court against the Commodity Futures Trading Commission allowed Kalshi to “offer event contracts that allowed its users to wager money on the U.S. election,” said MarketWatch. “You have a vision in recent elections of a completely different type of engagement in politics,” said John Herrman, a tech columnist at New York Magazine, to Vox. “You have people who have basically removed themselves from the democratic process to engage instead in a market process — it turns everyone into a speculator rather than a voter.”
Also, just as you can no longer watch sports without ads from various sportsbooks, CNN and CNBC have both “announced partnerships with Kalshi that will incorporate the app's voting markets on things like elections into the networks’ news coverage,” said NPR. Other networks could soon follow suit. “Entanglements with prediction markets might create other problems for journalists,” said The New Yorker. “Considering how significantly news coverage shapes betting odds, there’s ample opportunity for insider trading.”
Bets placed on certain candidates or issues might bring more interest or popularity and thus skew coverage or voter behavior. On top of that, gambling addiction is likely to become more prevalent. “We should probably prepare for a world where, much in the way that sports have become nearly impossible to follow or talk about without talking in this meta way about odds, betting outcomes, etc., politics will start to feel like that,” said Herrman.