Donald Trump and the Republican Party were technically the big winners last night. However, just below them in the tier of winning are election bettors and betting markets, who had this one down cold weeks ago.
There was skepticism of prediction markets, sportsbooks, and betting exchanges projecting Trump as the favorite to win the 2024 election. Were these markets rife with bad actors and manipulators bent on warping public opinion? Or were they just wrong?
But, as history makes clear, election odds, refined by election betting, can be a good bellwether of how Election Night will go. On Tuesday, as we reported on our live blog, they were right again. The degens won.
Indeed, even a month ago, U.S. election odds suggested that Trump would triumph, albeit maybe not as convincingly as he did.
"The Betfair Exchange has now correctly predicted 23 of the last 25 major elections across the world,” spokesperson Sam Rosbottom said in a statement Wednesday morning.
Polls 0
— Tarek Mansour (@mansourtarek_) November 6, 2024
Prediction Markets 1
Betfair, of course, legally facilitates wagering on politics in the United Kingdom. And if the 2024 election is an argument for the accuracy of election betting markets, it’s also an argument for legalized election betting in the U.S.
Some of the skepticism around election betting markets was driven because of the novelty of it all. Kalshi, for example, only began taking election bets en masse in early October.
Moreover, there was fuzziness about the legality of it all, as there are entities not regulated in the U.S., such as online sportsbooks and Polymarket, that also took action on the election from Americans.
As things stand, there is a legalized form of de facto wagering on elections in the U.S., via regulated entities such as Kalshi and Robinhood. However, that form of election betting is still being challenged in the courts and through proposed regulation by the Commodity Futures Trading Commission.
The CFTC has lost its legal battles so far and its proposed rule that would prohibit election wagering-related contracts has yet to be finalized.
Still, a new president and party in control of the White House could eventually result in leadership changes at the regulator when the terms for commissioners expire and they are potentially replaced by Trump appointees. Some current commissioners have argued against the CFTC’s proposed rule on political contracts as well, so it may be that the regulator eventually becomes more amenable to them.
Fear not
In the meantime, we’ve now had an election that suggests election betting markets are not the bogeyman. If anything, they are just another gauge of how a certain part of the population — bettors — view the prospects of candidates and parties. And it’s a pretty accurate gauge, at least this time around.
"There were times when the market favored Harris, but the momentum never stuck for her, and ultimately punters weren’t confident enough in her to make her the favorite going into it,” Betfair’s Rosbottom said. "The only time in Betfair Exchange US Election history when a favorite as the polls closed has lost was back in 2016, and that’s now a record that will continue to stand."
There’s an opportunity for states, if they so choose, to legalize forms of election wagering on their own, such as through regulated sportsbooks. I’ve argued for it, and I think last night’s results went a long way toward easing the concerns about what effects, if any, betting has on voting.
📈 Trump's price on the Exchange this morning:
— Betfair Exchange (@BetfairExchange) November 6, 2024
🕛 00:00 - 1.69
🕐 01:00 - 1.45
🕑 02:00 - 1.36
🕒 03:00 - 1.19
🕓 04:00 - 1.05
🕔 05:00 - 1.01
£179m of the total £250.5m traded on the Election Winner market so far has been on Donald Trump 💰 pic.twitter.com/juigIh528L
Have five million more people (and counting) voted for Trump over Harris because of betting odds? Or did five million fewer people vote for Harris because Kalshi projected a Trump win? Maybe some people were turned off, and maybe some research someday will prove me wrong, but I don’t think it was a deciding factor.
Bettors were right. Betting markets were accurate, as they’ve often been. The victory laps today aren’t just happening at Mar-a-Lago.
“Let's be very clear, Kalshi called the election before anyone else,” founder Tarek Mansour said on Twitter/X this morning. “And it wasn't just last night. Polls were overwhelmingly inaccurate while prediction markets were spot on.”
