Prediction markets linked to the 2026 US midterm elections have exceeded $1.4 billion in trading volume, according to a CNN analysis, as the industry faces a test of its forecasting accuracy amid continued skepticism about traditional opinion polls.
The November elections could influence whether prediction markets become an established source of political forecasting, particularly as both market probabilities and opinion polls indicate potential Democratic gains in Congress.
The industry’s credibility could suffer if those expectations prove inaccurate. PredictIt operator Aristotle’s CEO John Phillips acknowledged the stakes, saying “credibility is always on the line.”
Kalshi, the largest US prediction market operator, accounts for nearly $1.1 billion in midterm-related trading, covering election outcomes, voter turnout, endorsements, debates and campaign statements. Rival Polymarket has recorded more than $340 million across its US and offshore platforms.
Meanwhile, ForecastEx, owned by Interactive Brokers, has generated more than $6.4 million in trading volume, while UK-based Smarkets has recorded approximately $200,000 among British customers. Trading volume measures the total value of contracts exchanged before markets close instead of the amount initially wagered.
Industry analyst Dustin Gouker said election trading remains considerably smaller than activity involving sports and cryptocurrencies but provides information about public expectations. He expects trading to increase sharply on Election Day as professional bettors respond to changing probabilities. Most individual prediction market traders, however, lose money.
The expansion follows legal decisions that allowed election-related contracts to operate under federal law. The Biden administration previously challenged PredictIt and sought to restrict election markets in 2024, but the company prevailed in court.
The Trump administration has since adopted a more supportive regulatory approach and is finalizing rules protecting election markets. Smarkets is seeking approval to enter the US market, while other operators are positioning themselves ahead of the 2028 presidential election.
Despite this regulatory shift, the industry faces opposition from political figures who question whether the platforms constitute financial exchanges or gambling operations. Federal regulators have pledged to address insider trading, while Kalshi has suspended six 2026 candidates for improperly betting on their own races.
Prediction markets gained prominence during the 2024 presidential election, when they indicated Donald Trump’s victory earlier than traditional polling, which had largely characterized the contest as closely contested.
Kalshi CEO Tarek Mansour
Kalshi CEO Tarek Mansour described the 2026 midterms as a test of market-based political forecasting, arguing that trading aggregates information from a group of participants. The company has also attracted connections to political and financial institutions, with Donald Trump Jr. serving as an adviser.
Nevertheless, prediction markets are not equivalent to opinion polls and remain vulnerable to incorrect expectations. Brazilian President Luiz Inácio Lula da Silva’s election victory on Sunday surprised traders who had assigned him approximately a 20% chance of winning.
Kalshi spokesperson Elisabeth Diana defended that probability, saying, “If 20% candidates never won, the markets would be broken.”
Republican pollster Brent Buchanan questioned whether markets could replace voter surveys, emphasizing that polling relies on statistical methods and direct voter interviews.
CNN, which reported the trading figures, has a partnership with Kalshi and uses its data in news coverage, although its editorial employees are prohibited from trading on prediction markets.