Prediction markets tied to the 2026 US midterm elections have surpassed $1.4 billion in trading volume, according to a CNN analysis. The surge comes as the sector faces close scrutiny over its forecasting reliability, especially as skepticism continues to surround traditional opinion polling methods.
Major Operators and Market Activity
Kalshi, currently the largest US-based prediction market operator, has accounted for nearly $1.1 billion in trades related to the midterms. Its markets cover a range of political outcomes, including election results, voter turnout, and campaign events. Rival Polymarket has reported more than $340 million in trading across its US and offshore platforms. Other notable players include ForecastEx, with $6.4 million, and UK-based Smarkets, which has seen around $200,000 in volume among British users. Trading volume reflects the total value of contracts exchanged before markets close, not the original amount wagered.
Regulatory Developments and Market Expansion
The expansion of election-based prediction markets follows legal decisions that permitted such contracts under federal law. While the Biden administration previously sought to restrict these markets, PredictIt successfully challenged those efforts in court. The Trump administration has since moved to support prediction markets, with new rules being finalized to provide regulatory clarity. Some operators, such as Smarkets, are now seeking entry into the US market, while others are positioning for the 2028 presidential election cycle.
Challenges and Industry Credibility
The credibility of prediction markets as forecasting tools is under scrutiny as both market probabilities and opinion polls suggest possible Democratic gains in Congress. If these forecasts prove inaccurate, the industry's reputation could be at risk. Operators are also contending with regulatory and political challenges, including debates over whether prediction markets constitute financial exchanges or gambling. Federal regulators have also pledged to address insider trading, with Kalshi suspending six candidates for betting on their own races.
Why This Matters for Industry Stakeholders
For operators and affiliates, the rapid growth and evolving regulatory stance present both opportunities and risks. Increased trading volumes and mainstream attention could drive new customers and partnerships, especially as major media outlets like CNN incorporate market data into coverage. However, ongoing legal uncertainty and the possibility of regulatory crackdowns—particularly around insider trading and market integrity—could affect business models. Suppliers and regulators will need to adapt to a landscape where prediction markets play a more prominent role in public discourse and political forecasting.
Key takeaways
- US prediction markets for the 2026 midterms have surpassed $1.4 billion in trading volume.
- Kalshi leads with nearly $1.1 billion, followed by Polymarket and others.
- Regulatory approaches are shifting, with more supportive rules being finalized.
- The industry's credibility is being tested as election forecasts face public scrutiny.