Prediction Markets Face Scrutiny Ahead of 2026 U.S. Midterms
Kalshi and Polymarket face accuracy concerns after failing to predict recent global election upsets and seeing a sharp decline in trading volume.
Prediction market platforms Kalshi and Polymarket are facing scrutiny over their accuracy as the United States approaches the 2026 midterm elections. Despite their prominence during the 2024 presidential cycle, recent elections in Brazil, Serbia, and Wisconsin saw long-shot candidates defeat favorites who held up to 90% probability in betting markets. In Wisconsin, David Crowley defeated Francesca Hong despite markets assigning her a 96% chance of winning.
Both platforms struggled to identify the next prime minister in a recent Israeli election. Polymarket is currently investigating suspicious, well-timed trades favoring Benjamin Netanyahu that originated from newly created wallets. Analysts suggest these failures stem from low trading volumes and a reliance on flawed polling data.
For the upcoming U.S. midterms, both platforms project a high probability of Democratic control, assigning over 90% odds for the House and over 60% for the Senate. However, market engagement has dropped significantly. Trading volume through October 28 totaled approximately $400 million, a steep decline from the $2.5 billion recorded during the same period in 2024.
