Prediction markets like Kalshi and Polymarket officially don't care which side of a bet wins.
- There is no "house." They get their cut either way. It's a business model that's attracted billions of VC dollars.
Yes, but: Kalshi and Polymarket should be pulling hard for Democrats in today's midterm elections. Even if that feels counterintuitive.
Catch up quick: Prediction markets burst into the public consciousness two years ago, when their users correctly "picked" Donald Trump to beat Kamala Harris. It bestowed credibility at a time when public trust in traditional polling had cratered.
Fast forward: More recently, however, they had electoral misses in Brazil and Israel. Three would be a trend.
- Both platforms currently have markets on Democrats sweeping Congress, with "yes" at around 75%.
- If that's how today plays out, it would further cement prediction market legitimacy. A Republican win in either chamber, however, would dump them into the same pot as pollsters — even if 75% probability includes a sizable improbability.
Zoom in: Democrats are often more hostile to prediction markets than are Republicans, but companies like Kalshi and Polymarket don't have too much to fear from a Democrat-controlled Congress.
- Yes, there would probably be an uncomfortable hearing or two. But neither chamber would have veto-proof majorities, and the Trump administration has been very sympathetic to the industry.
- The real constraints, if any, are more likely to come via the Supreme Court.
The bottom line: Political predictions generate much less revenue for Kalshi and Polymarket than do sports predictions, but they have a much longer tail.