How The Betting Markets May Influence Voters

The Blind Ambition with Jack Kelly

Although we are having an American Presidential election, it looks like people from other countries can bet on the outcome of who wins the US Presidency. For example, a French trader known only as "Théo" has made headlines for placing a massive $30 million bet on Donald Trump winning the 2024 presidential election through the cryptocurrency prediction market platform Polymarket. If successful, his bet could yield approximately $80 million in returns, but he risks losing most or all of his investment if Kamala Harris wins. Some experts and politicians have raised concerns about election betting potential influence on voter perception and democratic processes, with Senator Jeff Merkley proposing legislation to ban such practices. Prediction markets can significantly influence public opinion on elections through several mechanisms. They provide real-time updates and respond quickly to new developments, offering a dynamic alternative to traditional polling, which captures only periodic snapshots of voter sentiment. Does Betting Make The Elections Better? By incorporating various factors beyond mere voter intention—such as economic data and current events—prediction markets compel participants to "put their money where their mouth is," potentially leading to more honest assessments of candidates' chances. This can create perceived momentum for candidates with strong odds, and the media often amplifies market movements, further shaping voter sentiment. However, concerns about reliability persist, as market manipulation practices like wash trading can distort outcomes; reports suggest that approximately one-third of Polymarket's trading volume may be artificial.