Countless gamblers who bet on the US presidential election now cannot wait to get their hands on huge payouts from online betting sites after Donald Trump’s surprise win. Gambling websites expect to give out about $450 million in total. But some lucky winners might have to hold on for a bit before they can grab their cash.
Prediction Markets React to Poll Discrepancies and Rapid Shifts in Public Sentiment
In the weeks before the election online betting sites saw a jump in activity. This was driven by the big difference between regular poll results and the odds shown on prediction markets. Most polls pointed to a close race between Trump and Vice President Kamala Harris. But prediction markets were more fluid showing quick changes based on breaking news, campaign momentum, and public opinion.
Samuel S.-H. Wang, who leads the Electoral Innovation Lab at Princeton University, said that prediction markets give insights into how voters act and what election results might be, reported Reuters. They do this by bringing together up-to-the-minute data that normal polls might miss. This has caused many people to see these markets as a more correct measure of election chances. This is because they can adjust to new events.
Shares of Trump Media & Technology Group, which had a strong connection to Trump’s campaign chances also saw a big jump going up by 8% on November 6. The company, which many Trump fans like, had hundreds of people come together for an election watch party on the video-sharing site Rumble. People got more and more excited as the results came in. At the event, people kept an eye on how well the group was doing money-wise along with the increasing chances shown on prediction sites like Polymarket.
Polymarket and Kalshi Dominate as Major Prediction Exchanges
Polymarket and Kalshi stood out as the busiest prediction exchanges. Polymarket, an offshore platform that runs on cryptocurrency, attracted gamblers from all over the world. It gave them a chance to bet until the AP, Fox News, and NBC declared Trump the winner. By the night of November 5, Polymarket’s payout pool reached an estimated $287 million. Kalshi, a US-based exchange for domestic users, had 40,000 people bet on Trump’s victory. Its payout pool hit $159 million on the evening of November 5. Kalshi allows bettors to keep trading until Inauguration Day on January 20, 2025.
A Paris-based investor dubbed the “Polymarket whale,” tops the list of Polymarket’s biggest winners. This bettor wagered $40 million on Trump-related outcomes. Should Trump win the popular vote, this investor could rake in $80 million.
Polymarket, which Peter Thiel’s Founders Fund backs, works differently from typical bookies. Its betting system uses peer-to-peer contracts where opposing parties agree on a price, with each share worth $1 in total.
The jump in Trump’s odds and the buzz around prediction market payouts highlight these platforms’ increasing importance. They are proving better at capturing real-time opinions and predicting election results than many traditional methods.
