Prediction market odds shape voters' views

A study by the Brennan Center for Justice in the US found that political odds on prediction markets influence voters' expectations. Through partnerships with major news organizations such as CNN, CNBC and Fox News, these odds reach wide audiences and are often presented alongside or in place of traditional polls.

In the study, participants were asked to predict which candidate in a pair would win a hypothetical congressional election. They were given information about the candidates, such as race, age, party and previous occupation. They were also shown win probability estimates from NBC News polls and from the prediction market company Kalshi. The figures from the two sources were randomly varied to create conflicting scenarios.

According to the results, candidates with higher odds on Kalshi were seen as more likely to win. A candidate with a 67 percent chance was chosen as the likely winner 10 percent more often than a candidate with a 50 percent chance. When the odds rose to 84 percent, this perception increased by 20 percent. Warnings about the limits of prediction markets did not reduce voters' reliance on these odds.

Only 19 percent of participants found election prediction markets accurate, compared with 37 percent for traditional polls. Those who thought the markets accurately reflect public opinion made up 29 percent, versus 55 percent for polls. Of the participants, 48 percent expressed support for tighter regulation, 23 percent for banning some types of markets entirely, and 16 percent for banning all types.

Many states are also taking steps on regulation. The Ohio Casino Control Commission sent cease-and-desist notices to some companies, including Kalshi and Polymarket. The state is now preparing legal action against these companies.