Elections in the US: is the betting market the new guru of the global economy?

While this “melodrama” unfolded, the ups and downs of each candidate were followed, not only in the polls, but also, for the first time in modern history, by prediction betting markets. These are, so to speak, simple online bets.

Bettors can put money on who they think will win and gamble by how much margin and in which states. At Polymarket, which only accepts bets in cryptocurrencies, You could even bet on whether Taylor Swift would attend Vice President Kamala Harris’ rally on Monday (spoiler: she went to the Kansas City Chiefs game instead).

The central question of whether Harris or former President Donald Trump would win the presidential election piled up bets of US$3.2 billion at Polymarket until election day. Most bets favored Trump, with $1.3 billion wagered on the former president and $827 million on Harris.

What analysts say

“Finally, The betting market was right and the Donald-Vance formula triumphed in the presidential elections. Once again, the polls could not get the result right. While they indicated a difference in favor of Harris of 1.1 points, the scrutiny showed 50.3% of the votes for Trump and 48.1% for Harris, so the Republican candidate won a difference of 2.2 points”, states the report of this Tuesday of the Investing in the Stock Market Group (IEB).

The document adds that “During the last few days no indicators of great significance were published. However, given the surprise that the publication of the latest Employment Situation Report represented, ““We thought it pertinent to highlight in this report what happened with the Initial Requests for Unemployment Subsidies (Initial Claims).”

“According to the betting market, It is assigned a 48% probability that Trump can resolve the conflict in Ukraine within the first 90 days of government, while the war in Gaza within the first 100 days. Regarding his cabinet, the preferences for Scott Bessent exceed those of John Paulson,” the report adds, alluding that it may also be that these events occur as the electoral result.

Prediction markets and why they are so accurate

Polymarket, together with Kalshi and PredictIt, lead the field of so-called prediction markets, platforms in which users from all over the world bet real money on the results of important events, such as elections. In these systems, users purchase “shares” with values ​​ranging from $0.01 to $1, reflecting the perceived probability of a specific outcome.

Defenders of platforms like Polymarket They argue that, because users must pay for their bets, the system is more reliable than traditional surveys, where people can respond without commitments. In prediction markets, The money at stake implies that users have financial incentives to be as accurate as possible, maximizing their profits and minimizing their losses.

Additionally, bettors take advantage of survey analysis and other relevant data to inform their decisions and it appears to improve the overall accuracy of predictions. Users who get it right win $1 per share, while those who don’t get it right lose their bet.

In these elections, platforms such as Polymarket, Kalshi and PredictIt had notable success in offering predictions close to the actual results. Although both surveys and analysts anticipated much closer results, the predictions of these markets have proven to be more accurate in many cases. However, There is still an open debate about whether prediction markets are truly superior to other traditional methods of anticipating outcomes. The future will tell.