What’s Happening With Prediction Markets?
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Part of our midterms guide. Start here: what the vote really changes for your money.
This is the first midterm where betting on the result is legal, national and on your phone. Kalshi won the right to list election contracts in court, and the regulator dropped its appeal in 2025. Betting markets now give Democrats about a 94% chance of taking the House and about seven in ten of winning the Senate. So the bets are big news. Are they big business?
| The number | Size |
|---|---|
| Traded on the 2026 midterms, all U.S. platforms (as of ~Oct 23) | about $1.4 billion |
| Kalshi’s normal daily volume | over $500 million |
| So the whole midterm equals | about 3 days of Kalshi trading |
| Share of Kalshi volume that is sports | about 80% |
The election is the advertisement. Sports is the business.
Elections made these platforms famous. Football pays the bills. That changes what Tuesday means: a volume spike that fades in days, and a political result that could shape who regulates them for years.
See more lines: how the midterm money splits
CNN’s count (as reported Oct 23): about $1.1 billion of the midterm volume is on Kalshi and about $340 million on Polymarket. Volume in October rose fast: DeFi Rate counted about $104 million of midterm trading across Kalshi, Polymarket US, ForecastEx and Gemini in Oct 1–20, up from about $41 million in the same days of September (reported). Volume is counted at $1 per contract; it is not cash lost or won. 3 days = $1.4B ÷ $0.5B per day (estimate; Kalshi’s daily figure is from spring 2026 and may be higher now).
What Happens The Day After?
History says the volume falls off a cliff. The morning after the 2024 election, Polymarket’s trading volume dropped 84%. Its December 2024 volume was a third below November’s. Kalshi didn’t top $1 billion in a month again until 2025, when sports took over. Expect the same this time, on a smaller scale. The difference is that in 2026 a quiet Wednesday doesn’t matter much, because the NFL plays on Sunday.
So Where Is The Real Risk?
In the states. Sports contracts look a lot like sports betting, and state gaming regulators want them licensed and taxed. Arizona filed criminal charges against Kalshi in March. Nevada is enforcing a ban. The federal government has fought back: the CFTC and the Justice Department have sued at least nine states, starting with Illinois, Arizona and Connecticut, to keep prediction markets under federal rules only. Appeals courts have split, and New Jersey has asked the Supreme Court to decide.
That case, not Tuesday, decides whether these platforms can sell sports contracts in every state.
Does A Democratic Congress Change That?
Less than you’d think, but more than nothing. Democrats are the loudest critics. More than 20 Senate Democrats asked the CFTC to reverse course on these markets in February. Senators Adam Schiff and John Curtis, a Republican, introduced a bill to ban sports contracts on federal exchanges. But a ban can’t pass past a presidential veto, and this administration has sued states to protect the industry.
What a Democratic House can do is ask questions, loudly. It gets subpoenas and hearings. Insider trading on war and policy bets is a likely early topic: Democrats have already pressed the CFTC on it, and Republican Oversight Chairman James Comer opened his own probe in May. Donald Trump Jr.’s roles could also draw questions: he advises Kalshi and sits on Polymarket’s advisory board. A Democratic Senate would also vote on future CFTC nominees. None of that stops trading. All of it raises the odds of tighter rules after 2028.
That’s the pattern with hot new markets: the business booms, and the rules catch up later. The same is true of the stocks that ride them. For families with $1 million or more invested, the question isn’t which platform wins; it’s how much of your wealth depends on one story. A Trefis partner firm can help you check.
How Do You Own Any Of This?
Kalshi and Polymarket are private. The public ways in split into two groups, and they’ve gone in opposite directions.
| Stock | Link to prediction markets | 12-month return | Market value |
|---|---|---|---|
| ICE | Invested $1.6B in Polymarket | +15% | $95B |
| CME | Runs FanDuel Predicts with FanDuel | +20% | $109B |
| Robinhood (HOOD) | $173M event-contract revenue in Q3 | −38% | $76B |
| Coinbase (COIN) | Sells Kalshi contracts in all 50 states | −56% | $38B |
| DraftKings (DKNG) | Launched its own predictions app | −31% | $10B |
| Flutter (FLUT) | FanDuel’s owner; partner to CME | −64% | $14B |
The exchanges, ICE and CME, are up and trade within 4% of their 52-week highs. The sportsbooks and the retail brokers are down 31% to 64%. Kalshi alone was valued at a reported $40 billion in its latest round, more than DraftKings and Flutter’s FanDuel parent are worth combined today. Investors are paying the new platforms what they used to pay the sportsbooks. For ICE and CME, prediction markets are a small slice of a much bigger business. For Robinhood, event contracts were about 12% of Q3 revenue.
The vote is a one-week spike. The court case is the business. The midterm adds about three days of volume and then fades, as it did in 2024. A Democratic Congress brings hearings, not a ban. The thing that decides how big these markets get is the Supreme Court fight over sports contracts, and the listed stocks that win or lose on it are the sportsbooks.
For the leader, see Kalshi.
Is Your Portfolio Betting On One Story?
Elections change the odds, not your plan. If you have $1 million or more invested, see what Tuesday means for your portfolio in a free 15-minute call with a Trefis partner – an expert financial advisor.
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