In recent years, people have found new ways to gamble their money away: the presidential election. The 2024 election has seen the largest increase in election betting so far, with over $2 billion trading hands over who will be president according to Polymarket.
Most bets take place on crypto-based gambling platforms, with varying degrees of legality. The bets work by allowing people to buy shares. If there is a 52 percent chance of Trump winning, you could buy a 52-cent share, receiving $1 if you win. The concept of turning the election into a type of casino is controversial. Proponents say it allows for more accurate polling, while detractors point out the potential for market manipulation and risks for the integrity of elections.
Election betting is not new. From the 1890s to 1930s, U.S. election betting was widespread, for a time exceeding the total volume of shares traded at the New York Stock Exchange. Regulations against election betting and the legalization of other forms of gambling ended its popularity according to Rhode & Strumpf.
The current is likely due to the ongoing legal battle between the Commodity Futures Trading Commission (CFTC ) and new gambling platforms according to Taylor Giorno of The Hill. Despite the CFTC’s appeal of the decision, the rulings help build credibility for these platforms, drawing in more users.
The notion of election betting being more accurate than polling may no longer be true because of modern polling techniques. In an October 14, 2024 poll by YouGov, 48.5 percent of people polled for Kamala Harris and 44.4 percent for Donald Trump. This contrasts with the betting markets. According to Polymarket, Trump has 55% odds of winning compared to Harris’ 45%.
Proponents of election betting will argue that polling is fallible, pointing the 2022 midterm elections and the predicted Republican majority. Yet election betting is fallible too – to market manipulation.
According to The Wall Street Journal, from October 5-19, over $30 million from four accounts pumped into bets that Trump will win, shifting the markets drastically away from polling numbers. While it is possible this is not market manipulation, the fact that a few wealthy supporters can sway the odds discredits the argument that having money on the line causes the markets to be more accurate than polling.
With the rise of crypto-based election betting, it is impossible to know who places what bets, raising the possibility of malpractice. The argument of election betting being more accurate than polling is questionable, as election betting is prone to market manipulation, though that does not mean polling is not fallible too. The risks remain; however, the possibility for bad actors to interfere in the election for profit increases with the legality of election betting.
