Online Election Betting
By Simon Bordoli
This is the first general election in the history of the United States to allow public online betting on the outcome of the presidential debate. A US appeals court approved this unprecedented change in election law. So far, over $100 million has been bet on the outcome by American citizens on the betting site, Kalshi. The payouts are based on the betting market odds for each candidate. For example, as of November 5th, Donald Trump has a 57% chance of winning and Kamala Harris has a 43% chance, according to Kalshi. If someone bet $100 on Harris winning, they would be entitled to a $312 payout if she won the presidency.
This legalization of election betting offers an alternative sense of public opinion than traditional polls. A New York Times poll on November 5th had Harris at 49% of the popular vote, while Trump was polling at 48%. Of course there is a discrepancy in the popular vote and electoral college that determines the final election results, but the divergence in odds between polling and betting is stark. The betting odds seem to reflect the Republican advantage in the electoral college. Regulated election betting at the New York Exchange Curb exchange correctly predicted 11 out of 15 races between 1884 and 1940.
Other investing platforms, like Robinhood, started offering election contracts this past week. The contracts will pay-out based on the outcome of the presidential election. However, there are concerns that the external influence of betting on elections will distract voters and influence votes for a candidate that will make them more money, not one that will best represent the values in office. Either way, online betting platforms have ushered us into a new era of American elections.
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