The betting market is heavily promoted by the supporters of Donald Trump as evidenced by his likely victory being manipulated by multi-million-dollar bets. This gives an impression that his election win is unstoppable as suggested by experts. Two of the biggest prediction exchanges, Polymarket and Kalshi, together have ended up with the pursuit of around $450 million. A third betting site, PredictIt, however, does not disclose its payouts.
Kalshi, in total, mentioned that 28,000 bettors placed their wagers on Harris while 40,000 wagers were on Trump. Predictions on the betting markets may not be similar to that of the traditional betting houses.
In this article, we will look into the rise of online election betting, expert opinions on prediction markets VS polls, and the implications of election betting on the whole.
Rise of Online Election Betting
Thousands of bettors who have wagered on the US Presidential Election are waiting for a potential payout of around $450 million from online betting sites after the former President, Donald Trump was elected in the most stunning comeback. However, some players may need to wait to collect their haul.
Online election betting sites exploded during the final weeks of the US Presidential Election because the odds on prediction markets for the former president sharply diverged from the opinion polls that raced locked in a dead heat.
The prediction markets have triumphed over traditional polling systems and proved to be more predictive after Donald Trump won the polarized contest. Prediction markets’ proponents argue that they are a more accurate gauge of the true scenario of the race. This swept up a wider view of the results, catching momentum, breaking news, and media influence in real-time, which may have a seismic impact on the campaigns.
The Shift in Betting Odds
The election betting odds, which consolidate data from different betting sites, indicated a fall in the chances of winning for Trump in the electoral college but now has pegged at around 52%, down by 4.4%, and rising almost 10 points in the last week. The major shifts in these betting markets have coincided with the fallout from the recent rally that Trump made at Madison Square Garden. It drew criticisms from both Republicans and Democrats due to its content and tone. The event contributed to the overall change in public sentiment among both voters and bettors alike.
Expert Opinion: Prediction Markets vs. Polls
According to the political economy professor, Koleman Strumpf, at Wake Forest University, who is known for studying the prediction markets, the real test is to find out whether prediction markets provide better forecasts than polls.
The professor believes betting markets do not delay information or spin numbers. They simply give numbers which makes it easier to forecast outcomes Compared to traditional opinion polls. Polling has already been facing many challenges, considering how people interact with their phones and the inconvenient, unrepresentative nature of online polling. Pollsters have exercised a monopoly on predicting elections for decades in the US but Strumpf believes that betting odds reflect election outcomes more accurately than opinion polls.
Potential Implications and Future of Election Betting
The election betting markets are attracting thousands of millions of dollars in bets placed on outcomes of the contest as well as the attention from both media and campaigns. Betting markets that have a long track record of being wrong before. They highly discounted the betting odds of Trump’s victory in 2016 and thought the Republicans would perform better in the 2022 midterms than they did in reality.
Many researchers believe that the markets serve as useful forecasting tools and the public must be skeptical of election betting sites while using them to keep track of political election data. Not all election betting platforms have the required track record and can be subject to manipulation considering that political betting involves huge sums of money and risk.
Moreover, there are concerns or questions related to the legality and ethics of betting on political outcomes. In the US, individual states regulate online betting while others have banned political or election bets outright.
Conclusion
Following the election victory of Donald Trump, many bettors anticipate a potential payout worth $450 million from online political betting sites. As the betting odds on Trump surge on prediction markets, platforms like Polymarket and Kalshi have gained tremendous attention for diverging significantly from traditional polls. If Trump wins the popular vote, he will walk away with $80 million.
