Kalshi and Polymarket attract record political trading activity as investors, researchers and regulators examine whether election betting markets can reliably reflect electoral uncertainty.

WASHINGTON, D.C. — November 3, 2026 — Prediction markets are facing one of their most significant tests as Americans vote in the 2026 midterm elections, with more than $1.48 billion in reported trading activity tied to congressional contests and political outcomes.

Platforms such as Kalshi and Polymarket have become increasingly influential sources of market-based election expectations, attracting attention from investors, political analysts and news organizations.

However, the enormous trading volumes have also intensified scrutiny over forecasting reliability, market manipulation and the possibility of political insiders profiting from sensitive information.

With control of Congress at stake, the election represents an important opportunity to evaluate how effectively these markets reflect uncertainty across hundreds of political contests.

Prediction Markets Attract Record Election Trading

Political prediction markets gained wider recognition during the 2024 presidential election, when their pricing indicated stronger expectations of a Donald Trump victory than some traditional polling interpretations suggested.

Since then, the industry has expanded rapidly.

According to figures cited by Reuters, Kalshi reported approximately $1.33 billion in midterm trading volume as of Monday, November 2.

Meanwhile, the Anti-Corruption Data Collective (ACDC), a Washington-based nonprofit research organization, estimated that Polymarket's congressional markets had attracted approximately $145 million.

Combined, the reported figures approach $1.48 billion.

Researchers also identified more than 28,000 individual midterm prediction markets, although trading activity was heavily concentrated in a relatively small number of competitive races.

These totals illustrate the growing financial scale of election-related trading.

Congressional Control Draws Intense Market Attention

Prediction markets allow participants to trade contracts linked to specific outcomes, including which party will control the House of Representatives or Senate.

Contract prices are commonly interpreted as market-implied probabilities.

According to data aggregated by analytics company BetInt, Tuesday afternoon prices implied approximately 94% for Democratic control of the House and 74% for Democratic control of the Senate.

Those figures represented market pricing at a particular moment, not official election results or independently established probabilities.

Market prices can change rapidly as traders respond to information, polling, election developments and trading activity.

Researchers emphasize that even contracts priced at high implied probabilities can settle differently from the market's prevailing expectation.

Senate Races Account for Much of the Trading

Although thousands of election markets have been created, a small number of closely watched Senate contests account for a substantial portion of trading volume.

The ACDC identified races in Texas, Michigan, Maine and South Carolina among those attracting considerable attention.

In Texas, the Senate contest between Democrat James Talarico and Republican Attorney General Ken Paxton had generated nearly $67 million in wagers by October 29.

On Tuesday afternoon, BetInt reported that market prices implied approximately 74% for a Talarico victory, an increase of three percentage points from midday.

Michigan's Senate contest between Democrat Abdul El-Sayed and Republican Mike Rogers had attracted more than $26 million.

Market prices implied approximately 76% for an El-Sayed victory, down two percentage points from midday.

These figures reflect trading activity and market expectations, not confirmed electoral outcomes.

How Accurate Are Political Prediction Markets?

Supporters argue that prediction markets can combine information from multiple sources because participants have financial incentives to evaluate outcomes carefully.

Academic research has found evidence that such markets can be reasonably well calibrated across large numbers of events.

A 2025 Vanderbilt University study examined nearly 2,500 prediction markets associated with the 2024 election and found generally favorable results for overall calibration.

However, researchers distinguish between two important concepts.

Calibration measures whether outcomes occur at frequencies consistent with the probabilities assigned to them.

Accuracy measures whether a forecast correctly identifies the eventual outcome.

A market can be well calibrated overall while still producing incorrect expectations in individual races.

Joshua Clinton, the Vanderbilt political scientist who led the research, cautioned that strong overall performance does not necessarily demonstrate how well markets handle highly competitive contests.

Because many elections have relatively predictable outcomes, broad performance measures can obscure weaknesses in closely contested races.

Previous Election Surprises Raise Questions

Despite their growing popularity, prediction markets have experienced notable misses.

Reuters highlighted several unexpected outcomes during U.S. primary elections and Brazil's presidential contest.

In Brazil, market prices reportedly implied only about a 20% chance that President Luiz Inácio Lula da Silva would defeat Flávio Bolsonaro.

Lula nevertheless won the election.

Researchers have offered different explanations for the discrepancy, including the possibility that traders placed excessive weight on assumptions about polling errors.

Platform representatives have responded that events assigned a 20% probability are expected to occur sometimes.

The example illustrates why market-implied probabilities should not be interpreted as guarantees.

Concerns Grow Over Insider Trading and Market Manipulation

The expansion of political prediction markets has also raised questions about market integrity.

Kalshi and Polymarket have faced scrutiny following reports that some political candidates placed wagers involving their own elections.

Research by the Anti-Corruption Data Collective also suggested that relatively small trades could shift prices in certain political markets.

Such findings have prompted concerns about whether market prices always reflect broad expectations or can sometimes be influenced by concentrated trading activity.

Both Kalshi and Polymarket say they have strengthened safeguards against misconduct.

Kalshi prohibits politicians and campaign workers from placing political wagers, according to Reuters.

The companies also argue that market prices can adjust when unusually large trades temporarily affect contract values.

However, researchers continue to examine whether existing safeguards are sufficient as the industry expands.

Large Investors May Influence Election Market Prices

Another important question concerns who supplies the capital behind political prediction markets.

Harry Crane, a statistics professor at Rutgers University, has suggested that a relatively small group of sophisticated, profit-seeking traders may account for a substantial share of market activity.

These participants often analyze polling, economic information and other data when determining how to trade.

Their activity can help correct prices when contracts appear mispriced.

However, large trades can also create noticeable movements.

BetInt identified two transactions of approximately $500,000 each, along with another $100,000 trade, placed on Republican outcomes through Kalshi during the previous week.

The analytics firm suggested the trades were likely associated with hedge funds.

Such activity demonstrates the growing participation of professional investors in political event markets.

It also highlights the importance of understanding how liquidity and concentrated trading can affect market prices.

Experts Say the Midterms Will Provide Valuable Evidence

Researchers view the 2026 elections as an important opportunity to assess prediction-market performance across a broad range of races.

Yesha Yadav, associate dean at Vanderbilt University Law School, described the midterms as a significant test for the industry's latest generation of platforms.

Because numerous congressional contests are taking place simultaneously, analysts will have more outcomes to examine when evaluating how market prices compared with actual results.

Industry representatives maintain that prediction markets offer a useful alternative perspective alongside traditional polling and political analysis.

Sean Patrick Maloney, chief executive of the Coalition for Prediction Markets, has argued that these platforms provide a market-based way to evaluate uncertain events.

However, academic researchers caution that no forecasting method is infallible.

Prediction Markets: Key Figures for November 3

CategoryReported informationTotal reported trading activityApproximately $1.48 billionKalshi midterm trading volume$1.33 billionPolymarket congressional wagersApproximately $145 millionNumber of midterm marketsMore than 28,000Texas Senate race tradingNearly $67 millionMichigan Senate race tradingMore than $26 millionHouse control94% market-implied pricing for DemocratsSenate control74% market-implied pricing for DemocratsMain concernsForecast reliability, manipulation and insider tradingKey research organizationAnti-Corruption Data Collective

Market figures reflect the times specified in the Reuters report and may change as trading continues.

What the 2026 Elections Could Mean for the Industry

The midterm elections offer prediction-market companies an opportunity to evaluate their models and demonstrate the usefulness of their platforms.

However, the results may also expose limitations in how market participants interpret polling, political developments and uncertainty.

Researchers will be examining whether contract prices were appropriately calibrated across competitive races and whether unusually large trades affected market behavior.

Regulatory scrutiny is also likely to remain an important issue as political wagering continues to attract significant financial activity.

For investors and observers, the central lesson is that market prices can provide information without eliminating uncertainty.

Final Thoughts: Billions in Trading Cannot Guarantee Election Accuracy

The rapid expansion of political prediction markets has transformed them into a prominent feature of the 2026 midterm election landscape.

With nearly $1.48 billion in reported activity across Kalshi and Polymarket, the industry has attracted substantial attention from financial professionals, researchers and political observers.

Academic studies suggest prediction markets can provide useful information when evaluated across many events.

Nevertheless, previous forecasting misses and concerns about market integrity demonstrate the limits of relying on trading prices alone.

The 2026 midterms will provide another major body of evidence for evaluating how accurately prediction markets reflect electoral uncertainty.

As Carlos Hardenberg, portfolio manager at MCP Emerging Markets, cautioned in the original Reuters report, these markets can be useful indicators, but they should never be mistaken for certainty.