Prediction Markets and Political Betting

Since former President Trump’s shock to the polling world in 2016, more and more people have been looking at alternative ways to predict political events, and the real-money prediction market, PredictIt, is leading the way. Through a no-action letter from the Commodities Future Trading Commission (CFTC), and hundreds of universities and academic partners around the world, PredictIt offers a completely legal way for people in the United States to wager on political futures or in other words political betting markets. Instead of traditional polls, people are looking towards the wisdom garnered from large crowds of people making independent trading decisions. 

People are betting on research (and their real-world experience) that says real-money markets on the outcome of uncertain future events have a lower prediction error than conventional polling models. In other words, when crows of people have real money in the game, the forecasts of election outcomes can be greatly improved over the polls we’re used to. 

While some old school politicos still rely on traditional polling, political prediction markets are the way of the future. Maybe it’s because people are less trusting of traditional mainstream media outlets, or that they’re less willing to tell a stranger doing public opinion research what they really think, but it looks like prediction markets and political betting are here to stay.