Small bets can move U.S. election prediction markets, research finds

  • Anti-Corruption Data Collective found congressional prediction markets vulnerable to relatively small wagers.
  • Less than $1,000 shifted probabilities by 10% in 94% of more than 11,000 markets.
  • Polymarket markets typically retained altered levels for around four days.

Prediction markets tracking this year's U.S. congressional elections are vulnerable to relatively small wagers, according to research from the Anti-Corruption Data Collective. The report found that in more than 11,000 congressional-race markets across Kalshi, Polymarket and Polymarket's U.S. platform, 94% would move by the equivalent of 10% in probability after a single bet of less than $1,000. In hundreds of Polymarket cases, the altered levels lasted 24 hours and typically remained for around four days. The findings have heightened concerns among Democrats and consumer advocates that election betting could undermine confidence in electoral outcomes or encourage insider trading. Kalshi and Polymarket rejected the conclusions, arguing that traders have financial incentives to correct distorted prices. Kalshi cited a case in which prices corrected within nine seconds after a trader committed more than $1 million to a market involving former Los Angeles mayoral candidate Spencer Pratt. An earlier account of the research cited a $3,500 bet moving 97% of midterm-related markets by at least five cents, creating a discrepancy with the later figures.

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