Donald Trump’s chances of defeating Kamala Harris saw a significant rise on Polymarket this week, raising concerns about possible market manipulation just weeks before the U.S. presidential election. Trump, the Republican nominee, currently holds a substantial lead over the Vice President on the decentralized prediction platform, leading to debates about the integrity of these betting markets.
According to Polymarket’s official “Presidential Election Winner 2024” poll, bettors favor Trump over Harris with 62.1 percent to 37.9 percent. This dramatic shift in odds has drawn attention as it coincides with a significant bet from one user.
A bettor known as Fredi9999 reportedly placed a massive $20 million wager on Trump, skewing the market and raising concerns about the validity of Polymarket’s odds. In contrast, national polls depict a much closer race, with Harris leading Trump 48.5 percent to 46.2 percent, respectively.
The controversy surrounding political prediction markets has intensified as Election Day nears. Billionaire and X CEO Elon Musk recently claimed, albeit falsely, that such platforms are “more accurate than polls” because they involve “actual money.” However, critics argue that large sums of money can distort the results.
Several U.S. lawmakers have expressed their opposition to political betting platforms. Senators Elizabeth Warren, Richard Blumenthal, and Jeff Merkley, among others, wrote to the Commodity Futures Trading Commission (CFTC) expressing concerns that big money bets could influence the election outcome. “Election gambling fundamentally cheapens the sanctity of our democratic process,” they stated, adding that “political bets change the motivations behind each vote, replacing political convictions with financial calculations.”
Just last month, prediction market Kalshi won a highly-publicized court battle allowing it to sell political event contracts. However, a federal appeals court has since expedited a legal review of that decision. According to Morning Brew, Kalshi has pulled in over $12 million on bets related to Harris and Trump. On Kalshi’s platform, Trump leads Harris 57 percent to 43 percent. But experts warn that these numbers might not reflect reality.
Brandon Carl, Head of AI and Strategy at Smarsh Inc., cautioned that these betting markets could drive “herd behavior,” as people tend to follow perceived winners rather than true odds. He noted, “The great danger is that people assume that betting markets are a reflection of reality. But betting markets are still markets, which means they are prone to manipulation. The incentives certainly exist.”
As the 2024 U.S. presidential election approaches, questions about the legitimacy of prediction markets like Polymarket and Kalshi remain unresolved, leaving many to wonder just how much influence big bets will have on the final outcome.
Twitter Text: “Polymarket’s real-time odds are starting to price in a Trump win, which could explain the recent rally in stocks and crypto. Markets are reacting—who do you think takes it?” — HZ (@MFHoz) October 18, 2024
Twitter Text: “All political views aside… I worry that betting markets like Polymarket end up used to influence stock markets as well as political outcomes. There were reportedly two whale bets totaling $4 million betting on Donald Trump. It moved the betting markets. Subsequently stocks…” — Brandon Carl (@brandonjcarl) October 17, 2024
