WASHINGTON – The US midterms are playing out against a controversial new scoreboard, as the nation votes in its first major elections since prediction markets went mainstream.
With hundreds of millions of dollars on the line, experts are warning that the proliferation of live odds into news coverage and on social media could sow confusion – and provide fodder for misinformation.
Concerns range from motivated actors taking extreme measures to sway markets, to voters overtrusting the odds and baselessly blaming fraud where election results differ.
US President Donald Trump has already made unsubstantiated allegations of fraud central to his political movement ahead of the Nov 3 vote.
Polymarket and Kalshi are allowing users to buy and sell contracts on thousands of outcomes related to the midterms, despite surveys showing most Americans oppose betting on elections.
The companies have also partnered with prominent news organisations.
“They’re more and more becoming part of how Americans understand elections,” said Davina Hurt, government ethics director at Santa Clara University’s Markkula Center for Applied Ethics.
“Elections are not games,” she told AFP. “My concern is that we’ve reached a point where financial market expectations carry more weight in the public’s mind than the votes themselves.”
‘Not a promise’
Prediction market trading has surged amid legal battles over whether they should be regulated as federal commodities or under state gambling laws.
Kalshi said its markets offer unique data distinct from polling, that probabilities do not guarantee outcomes and that efforts to manipulate odds are canceled out by other buyers.
“Kalshi should be seen as a complement to traditional polling,” head of communications Elisabeth Diana told AFP.
“On prediction markets, you trade what you think will happen. On polls, you say what you want to have happen.”
Yet experts expressed fears over markets being misconstrued, especially as Polymarket and Kalshi issue race “projections” on social media.
A high probability “is not a promise,” Hurt said. “When the prediction fails, that’s not evidence that elections fail. But people are going to read that in.”
Los Angeles
When Republican Spencer Pratt lost the Los Angeles mayoral primary in June, right-wing influencers pointed to prediction market odds which showed him favoured to advance to the general election as evidence of fraud.
Some X posts spreading misinformation carried “paid partnership” tags, prompting backlash and action from Polymarket and Kalshi.
“The June primary reinforced how quickly expectations about election outcomes can become confused with actual election results,” said Michael Sanchez, spokesman for Los Angeles County’s registrar’s office.
In a recent memo shared exclusively with AFP, Kalshi told its paid partners they “shall not call into question the integrity or accuracy of any official vote tally result, legal ruling, or other official or formal determination in connection with the election”.
Partnerships will be terminated with those who post without evidence “that an election result has been corrupted, rigged, compromised, or otherwise improperly administered,” it said.
Polymarket did not respond to requests for comment.
Bracing for confusion
For the first time, researchers who monitor election misinformation at University of Washington’s Center for an Informed Public are tracking how prediction markets are misrepresented online.
“There’s more reason to create these rumors because there’s that sort of financial element tied to it,” senior research scientist Rachel Moran told AFP.
“It’s becoming a significant part of our work.”
Jared DeMarinis, elections chief of Maryland, has asked the state to investigate whether election betting via prediction markets is legal under local law.
He told AFP he is prohibiting poll workers from placing election-related bets.
He still worries lopsided odds could depress turnout – and inspire false claims that wear down his team, already facing pressure from Trump’s administration.
“Election administrations are all being under attack,” he said. “Now you’ve just put more gasoline on this by having money involved.”
“You just don’t want to have the legitimacy of the outcome in question.” AFP