Hours before the first presidential election debate between Democratic Vice President Kamala Harris and Republican former president Donald Trump, prediction markets reflect polls in defining the race for the White House as air-tight.
While anticipation of the debate at the National Constitution Center in Philadelphia is pitched — with Harris expected to wield her prosecutorial background against a bombastic competitor who plays loose with facts and rhetoric — political betting exchanges like PredictIt reveal that after an early rush of support for Harris, margins have narrowed considerably.
Harris used her replacement of President Joe Biden as the nominee in July and a strong Democratic National Convention in August to surge to a position as a 60-cent pick on Aug. 11. Trump’s price, meanwhile, slumped into the 50s. But as of Tuesday morning, a Harris “Yes” stock for victory was priced at 52 cents, Trump at 51 cents, making her a favorite by the smallest of margins. By the afternoon, it was 52-52.
Harris fell to 52 cents on Sunday, her lowest point since becoming the nominee, before rebounding. The price of a “No” Harris vote was up a penny to 48 cents from yesterday.
Harris’ surge built as much as a 16-cent advantage over Trump on Aug. 12, but speculators have slowly brought the race back to dead-even, entering what figures to be a crucial milepost tonight.
The race isn’t as close at Polymarkets — 53-45, Trump — but that exchange doesn’t legally take into account Americans’ perspective, as the cryptocurrency site bans US users. There is high interest in the contest abroad, though. Dune Analytics reported that more than $1.1 billion had been wagered on the site since June, with 88% pouring into the US presidential market.
Odds at legal bookmakers in other countries also portray Trump as the favorite. Aggregated odds from the United Kingdom had Trump at -110 Tuesday — (Harris, +116), meaning a 52% implied probability of victory.
Harris has narrowed those odds since July, though, when she became the favorite at PredictIt.
Presidential Prediction Market Only Legal Option in US
Betting on politics is illegal in the United States but remains regulated and popular in much of the world, including Ontario, Canada. Exchanges like PredictIt are regulated by the Commodities Futures Trading Commission and allow speculators to price bids against other users.
Kalshi Court Win Could Be Telling
Kalshi, another US exchange that allows for speculating on non-sports events, is currently offering a market on the number of debates between Harris and Trump.
Doing so constitutes a win for the start-up. The US District Court for the District of Columbia last week temporarily overruled the CFTC in shutting down a market under the control of Congress after the November elections. While that market hasn’t returned, Kalshi is dabbling at the edges with the debate market as it awaits a final ruling from the DC Circuit.
CFTC chairman Rostin Behnam said in May: “Contracts involving political events ultimately commoditize and degrade the integrity of the uniquely American experience of participating in the democratic electoral process. Allowing these contracts would push the CFTC, a financial market regulator, into a position far beyond its Congressional mandate.”
The interest in political betting markets, both as a pastime and a source of information appears to be having a renaissance in the US. Once an informal form of political polling, these markets are ever-frequently referenced on mainstream news channels as another indicator of public opinion.
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