Midterm Odds Can Be Moved For $3,500, Study Finds
Moving the price of a congressional race on a prediction market can cost as little as $3,500, even as betting on the midterms has climbed past $431 million.
The figures come from the Anti-Corruption Data Collective, whose final pre-midterm analysis was published on the eve of the vote and covers data to October 29. It builds on earlier findings that Gambling.com has tracked as midterm election betting kept rising.
The non-profit counted 28,845 House and Senate markets across Kalshi, Polymarket and Polymarket US. It says the sheer number of contracts, many of them thinly traded, leaves prices open to being pushed around.
The Cost Of Moving A Market
ACDC looked at the 15,985 congressional markets that have live order books. In 96% of them, a trader could shift the displayed price by five cents for $3,500 or less.
In 90% of congressional races, even the most expensive market to move cost under $25,000 for the same five-cent change.
The group first flagged the issue in September, when it told CNBC that moving most campaign-related markets costs less than the $3,500 maximum personal campaign contribution allowed under federal law. Today's update says that conclusion still holds, now that more liquidity has entered many contracts.
Who Is Trading
Concentration is rising on Polymarket, where the top 1% of wallets now account for 75% of volume, according to the briefing. ACDC also reports 544 wallets making 591 low-stakes round trips in 22 markets on fringe and outsider candidates.
About $618,395 moved through those trades for a total profit of $34, a pattern the group says is indicative of wash trading or money laundering.
The report also sizes up the insider-trading risk. Volume on midterm markets that resolve on something knowable, such as endorsements, has reached $25.5 million, and ACDC expects the risk to sharpen in the closing stretch of campaigns.
What ACDC Wants
Research fellow Michelle Kendler-Kretsch said prediction markets can produce reliable probabilities under the right conditions, but that those conditions are still not met in a worryingly large share of markets. Her advice to the public and media, as results come in, is to remember that prices can be manipulated and should not be treated as infallible.
ACDC adds that the same weaknesses are showing up abroad. Its briefing cites media reports of insider-trading concerns around elections in Portugal and, most recently, Israel, and says the big platforms list markets on elections in countries where local regulators have banned them. It also warns that foreign actors can trade on US election markets, potentially exploiting the price weaknesses to sow confusion.
The group points to the LA mayoral race as an example closer to home. Markets on Spencer Pratt's campaign repeatedly defied negative polling and news about his candidacy, rebounding after an initial dip, and some online influencers later cited those prices to question the veracity of election results.
Co-founder David Szakonyi went further, arguing that platforms have used a unique regulatory window to go all in on the midterms. He said legislation giving states jurisdiction over prediction markets would go a long way towards banning election betting on sportsbooks, and called it a priority for the next Congress.
The findings add to scrutiny of election contracts as polls open. For more on how the legal and regulatory fight is developing, see our prediction markets guide.
Refer to Cashback Terms & Conditions for full program terms.
