As the first polls close in just a few hours, two prominent election betting platforms, Kalshi and Polymarket, have surged to the top of the Apple App Store’s chart. Kalshi, ranked No. 1, and Polymarket, at No. 2, have become the most downloaded free apps, surpassing other popular applications such as ChatGPT, Facebook’s Threads, McDonald’s, and even Google.
Kalshi, which relaunched its 2024 presidential election betting market on October 2 following a federal appeals court victory in September, is the only prediction market operating in the U.S. that is regulated by the Commodity Futures Trading Commission (CFTC). Polymarket, meanwhile, remains a significant player despite regulatory hurdles, and its platform has witnessed significant activity.
These political betting exchanges don’t just focus on elections; they allow users to wager on a variety of issues, ranging from sports and entertainment to business and science, indicating the growing importance of prediction markets. Kalshi cofounder Luana Lopes Lara expressed confidence on X, stating, “Prediction markets are the future.”
The rise of these platforms can be traced back to the 2016 presidential election when Donald Trump’s unexpected victory over Hilary Clinton highlighted the potential of betting markets in predicting election outcomes. Although PredictIt had initially led the way with its CFTC-sanctioned betting exchange, limitations on PredictIt’s platform, including the absence of an app, led to its downfall during the 2020 election.
Kalshi and Polymarket have since filled the void. Despite Polymarket facing a civil penalty from the CFTC in early 2022 and being restricted from allowing U.S.-based customers to participate, the platform’s 2024 election contract has already fielded over $2.8 billion in wagers as of 6 pm EST on Election Day. In comparison, Kalshi’s 2024 White House outcome has seen a handle of less than $300 million.
As the polls prepare to close, the betting markets reflect a strong preference for Trump. On Polymarket, Trump’s shares are trading at 61 cents, while Harris is valued at 39 cents. On Kalshi, Trump’s stock sits at 58 cents, with Harris at 42 cents. Winning shares are redeemed at $1, and while Polymarket, operating as a decentralized blockchain platform, does not charge any fees, Kalshi has a more complex fee structure.
Kalshi imposes a $2 withdrawal fee per account and trading fees on orders executed immediately. The trading fee is calculated as a variable percentage of the expected earnings on an individual contract. Although the formula appears complex, an example provided by Kalshi simplifies it: for a contract trading at 50 cents with a purchase of 100 shares, the fee amounts to $1.75.
With intense interest in the election and the continued rise of betting platforms, it’s clear that political wagering is becoming an increasingly influential tool in gauging public sentiment and predicting electoral outcomes.
