How Trump’s Victory Grants Election Betting Platforms a Promising Future

Donald Trump’s triumph in this year’s bitterly fought presidential race promises to rapidly usher in some very big changes for the nation’s politics, society, and economy. By contrast, one feature of the 2024 contest that doesn’t look likely to alter anytime soon is online election betting using forecasting platforms like Kalshi and Polymarket—whose huge popularity shot their apps to the top of the Apple App Store’s free downloads ahead of Tuesday’s vote.

How big a deal is the surge in presidential betting for those two companies—and the future of U.S. politics? Consider how fast interest in the platforms grew ahead of the election. Prior to a September court decision in its favor, New York-based Kalshi had been prohibited from including elections in the long list of events it allowed users to wager on. By Tuesday afternoon, the company’s customers had gambled over $500 million on either Trump or Democrat Kamala Harris winning the race. Kalshi’s offshore, cryptocurrency-based rival Polymarkets attracted around $4 billion in its own bets on the presidential contest.

Moreover, Kalshi might well have equaled or surpassed Polymarket’s huge volume of business if it hadn’t been prevented from getting in on that activity so late in the 2024 election.

In September it won a legal challenge to the Commodity Futures Trading Commission’s (CFTC) longstanding ban on U.S. forecasting platforms including politics in the many diverse scenarios customers bet on. That victory allowed Kalshi to start offering election positions in October. American stock trading and investing app Robinhood also jumped on the court’s decision to offer its own presidential betting through its Robinhood Derivatives platform.

But those launches by both companies came well after Polymarket began offering Trump-Harris betting positions. Though it’s an American company, Polymarket operates offshore, where it provides election wagering that is blocked for U.S. customers under an agreement with the CFTC—which has apparently never heard of location masking virtual private networks.

But with the regulator’s U.S. ban overturned, domestic interest in election betting opportunities grew quickly. As people flocked to wager on what polls suggested would be an ultra-tight race as voting neared, Kalshi shot to the top spot of free Apple App Store downloads this week, according to Yahoo News. The same fervor drove Polymarkets’ app to the second spot.

As voters continued casting ballots Tuesday, both apps rocketed farther past the usual free app favorites, including ChatGPT, Facebook’s Threads, Google, and McDonald’s. That partially fulfilled an objective that Kalshi CEO Tarek Mansour set when the company launched its political betting option last month.

“I think we’re gunning for No. 1 for the entire App Store by Election Day, so the demand curve truly is exponential,” Mansour told CNBC in late October.

Reaching number one for free apps isn’t bad, but Mansour is probably still looking to top all downloads in the next election cycle, following the company’s big 2024 win. Indeed, there are two additional reasons why this year’s election and its result are likely to continue powering the rise of political betting on forecasting platforms.

The first is that despite what countless opinion polls had predicted would be an excruciatingly tight race, bettors on Kalshi, Polymarket, and Robinhood proved far more accurate in forecasting Trump’s victory by comfortable margins. That prescience appeared to confirm the arguments of predictive companies about the more reliable outcomes projected by their gambling odds.

Those businesses say that works by letting people wager their money on what they view as the most likely political outcomes, not those they’d personally prefer. The odds generated by customers betting with the brains rather than their hearts almost always hew closer to final outcomes than opinion polls, the platforms contend.. That claim is hard to argue with right now.

Meanwhile, the CFTC’s ban on U.S.-based platforms offering elections in their betting scenarios was essentially based on ethics. The prohibition sought to prevent early projections from betting trends from influencing real voter decisions at the polls. And, indeed, there were recent accusations that a France-based participant in Polymarket’s presidential betting sought to create the impression of an inevitable Trump victory by placing multimillion-dollar wagers to skew the odds. Either way, that “whale” just made a bundle.

The newly reelected Trump will probably have no problem with those allegations of influencing that betting market, or the ethics of election gambling in general. Indeed, the regulation-hating businessman would quite likely block any new legal effort by the CFTC to reimpose its prohibition on principle—and denounce it as the kind of excessive rule-making that prevents companies from providing valuable services.