Prediction markets see surge in activity ahead of U.S. midterms, host summit to compare with polls

Trading volume spikes as midterms approach

Combined monthly trading volume on prediction‑market platforms Kalshi and Polymarket jumped from $26 billion in May to $53 billion in July, according to a Pew Research Center analysis. Most of the activity was driven by sports contracts.

Political contracts remain a small slice

Politics accounts for a modest share of that volume. Polymarket averaged about $2 billion per month on political contracts this year, while Kalshi’s political trading stayed under $300 million per month. By July, more than $30 million had been wagered on which party would control the House and the Senate.

Regulatory background

The U.S. Commodity Futures Trading Commission (CFTC) previously barred Kalshi from listing contracts on which party would control Congress, labeling them “gaming.” In 2024 the agency proposed a rule that would have classified election contracts as gaming, but it withdrew the proposal in February. On June 10 the CFTC released a proposed “structured framework” that would treat election contracts differently, a move noted in a Congressional Research Service analysis.

NEXTPredict summit to examine markets vs. polls

Former NBC News political director Chuck Todd will host the NEXTPredict summit in New York on October 22‑23. The two‑day event will bring together reporters, market operators and analysts to explore how pollsters and prediction markets interact and whether markets are healthy for politics.

Todd said he wants to learn how much pollsters and markets need each other, how much trading is hedging versus entertainment, and whether markets could create a “different class of politician.” He also shared his view on the Texas Senate race, saying he would be more surprised if Democrat James Talarico loses.

Market thinness and pricing accuracy

Research from the Anti‑Corruption Data Collective found that a $3,500 bet – the maximum personal campaign contribution under federal law – can move 97 % of midterm‑related markets by five cents or more, highlighting how thin many congressional markets are.

Kalshi spokesperson Dani Lever noted that in any liquid market, mispricing represents “free money.” A Morgan Stanley study of more than 72 million Kalshi trades, reported by Decrypt, showed that market prices tracked actual outcomes closely. Morgan Stanley will lead a panel on institutional capital at the summit.

What is confirmed

• July 2024 combined trading volume on Kalshi and Polymarket reached $53 billion.


• Political trading volume is about $2 billion on Polymarket and under $300 million on Kalshi per month.


• The CFTC withdrew its 2024 proposal to treat election contracts as gaming and issued a new framework on June 10.


• Chuck Todd will host the NEXTPredict summit on October 22‑23 in New York.


• Studies show market prices often align with real election outcomes.

What remains unclear

• How much prediction‑market activity will influence voter behavior or campaign strategies.


• The balance between hedging (risk management) and entertainment motives in political trading.


• Whether markets will become a reliable supplement to traditional polling methods.

Why it matters

Prediction markets aim to “harness the wisdom of the crowds,” potentially offering forecasts that are more reliable than polls. If markets prove accurate and liquid, they could become a new source of information for analysts, journalists and possibly policymakers during elections.

What happens next

The NEXTPredict summit will convene roughly 2,500 attendees. On the second day, Morgan Stanley will discuss institutional interest in prediction markets, and Todd will moderate a session titled “Who Calls the Midterms: Polls, Models or the Markets?” featuring experts from Columbia University, Decision Desk HQ and PredictIt.

Sources

• Decrypt