US Election Prediction Markets Surge to $220 Million Amid Public Skepticism

US congressional election prediction markets have generated more than $220 million in trading volume during the 2026 election cycle, but a new nationwide survey suggests their rapid commercial growth is not matched by public acceptance.

Two Reuters reports published on October 12 and 14 reveal a striking contradiction. While trading on platforms such as Kalshi and Polymarket is expanding rapidly, most Americans oppose betting on elections and government decisions. Approximately three-quarters of respondents consider prediction market wagering a form of gambling, despite the industry's argument that event contracts are financial products.

The findings add a new dimension to the legal debate surrounding prediction markets and whether their growing popularity among traders justifies treating political outcomes as tradable financial events.

Election Betting Volume More Than Doubles

Research by the Anti-Corruption Data Collective (ACDC), reported by Reuters on October 14, found that trading on 2026 US congressional election contracts had exceeded $220 million by September 30.

That compares with approximately $92 million recorded across the entire 2024 congressional election cycle, including activity after Election Day.

The researchers examined more than 21,000 election markets across Kalshi and Polymarket's US and international platforms, compared with 463 congressional markets in the previous election cycle.

The increase reflects more than growing interest in predicting election winners. Traders can now speculate on narrower political outcomes, including winning margins, voter turnout and individual congressional races.

In 2024, approximately 71% of congressional election markets focused on which candidate would win. In 2026, that proportion fell to 16%, while 58% of markets focused on winning margins.

However, Reuters noted that most actual trading volume remains concentrated in traditional winner markets, with many specialized contracts attracting limited activity.

The Texas Senate race has generated particularly strong interest, alongside contests in Maine, Michigan and South Carolina.

Just 1% of Polymarket Wallets Generate 70% of Congressional Trading

Perhaps the most significant finding concerns market concentration.

According to the ACDC analysis, the top 1% of wallets on Polymarket's international platform accounted for approximately 70% of congressional election trading volume.

This concentration challenges the assumption that prediction market prices necessarily reflect the collective judgment of a broad and diverse group of participants.

But market prices are influenced by the participants supplying liquidity and placing trades. When activity is heavily concentrated among a small number of accounts, the resulting probabilities may be particularly sensitive to their positions.

Nevertheless, the findings raise legitimate questions about how representative election market prices are, especially when those prices are increasingly cited by news organizations and political commentators.

Another limitation is that wallet-level analysis does not necessarily identify individual beneficial owners. One person may control multiple wallets, and the available data does not establish the identities or motivations of the largest traders.

Most Americans Oppose Betting on Elections

The commercial expansion contrasts sharply with public opinion.

A Reuters/Ipsos survey conducted between September 30 and October 5 questioned 4,506 US adults and found substantial opposition to betting on political and government events.

Opposition crossed party lines, with 69% of Democrats and 61% of Republicans opposing prediction market wagering on election results.

The survey also found that 65% of Americans opposed betting on US military actions, while 63% opposed contracts linked to government policy announcements or decisions.

Perhaps most importantly for the industry's regulatory positioning, approximately 75% of respondents considered prediction market wagering to be gambling. Only 8% disagreed with that classification.

These results indicate that the industry's distinction between financial trading and gambling has not convinced much of the American public.

The poll had a reported margin of error of approximately two percentage points.

Insider Information Becomes a Central Regulatory Concern

Political prediction markets raise risks that are different from those associated with conventional sports betting.

Candidates, campaign employees, government officials and other politically connected individuals may possess information unavailable to ordinary traders.

Such information could concern campaign decisions, policy announcements, candidate withdrawals or other events that directly determine contract outcomes.

Reuters reported that Kalshi has suspended candidates for betting on their own elections. The platform prohibits political candidates from wagering on their own races and restricts trading by campaign workers.

The Reuters/Ipsos survey found particularly strong opposition to this practice. Ninety-three percent of Democrats and 89% of Republicans considered it inappropriate for members of Congress or their staff to bet on political events.

The question is therefore not simply whether election prediction markets should exist, but who should be allowed to participate and what safeguards should apply.

Are Prediction Markets Financial Products or Gambling?

The new findings arrive as US authorities continue debating the legal classification of event contracts.

The Commodity Futures Trading Commission (CFTC) maintains that qualifying event contracts fall within its federal derivatives jurisdiction.

State gambling regulators, however, argue that certain contracts effectively constitute wagering and should be subject to state gambling laws.

For Kalshi and Polymarket, federal financial regulation offers a potential alternative to obtaining separate gambling authorizations across multiple states.

For traditional sportsbooks and casino operators, the distinction has important competitive implications. Products that resemble betting may face different licensing, taxation and consumer-protection requirements depending on how they are classified.

The October research does not resolve this legal dispute. Public opinion cannot independently determine whether an event contract meets the statutory definition of a financial instrument.

However, it adds political pressure to a debate that could eventually require further judicial clarification or congressional intervention.

What the Findings Mean for 2027

The latest research suggests that prediction markets face three interconnected challenges heading into 2027.

First, the industry must demonstrate that market prices provide reliable information rather than merely reflecting the positions of a small group of influential traders.

Second, platforms must show that their surveillance and compliance systems can identify inappropriate trading by politically connected individuals.

Third, they must address a public perception problem. A market may attract substantial trading activity without achieving broad public acceptance.

For the traditional gambling industry, the implications extend beyond election contracts. The outcome of the US regulatory debate could shape how regulators license and supervise future sports, political, and financial event products.

The $220 million trading milestone demonstrates the commercial potential of political prediction markets

Yet the concentration of trading activity and the Reuters/Ipsos findings suggest that commercial success alone will not settle questions about their legitimacy. Prediction markets may provide useful information about future events, but their credibility depends on transparent trading conditions, effective controls against misconduct and a regulatory framework capable of addressing conflicts of interest.

The defining question for 2027 may not be how much money Americans are willing to trade on elections.
​​​​​​​
It may be whether regulators and the public are prepared to accept elections as a financial marketplace.

References

Lang, H., & Price, M. (2026, October 14). Inside the booming market for US midterm election bets. Reuters. https://www.reuters.com/legal/government/inside-booming-market-us-midterm-election-bets-2026-10-14/
Prentice, C., & Lange, J. (2026, October 12). Most Americans oppose betting on elections, government events, Reuters/Ipsos poll finds. Reuters. https://www.reuters.com/world/most-americans-oppose-betting-elections-government-events-reutersipsos-poll-2026-10-12/