Polls have put Harris and Trump in a close race. ‘Gambling polls’ say otherwise | Business

Mcheese players may want to sit out the US election. It’s too close to call with Kamala Harris and Donald Trump neck and neck, according to official polls. But the former president’s campaign is tied to signs he says prove he is indeed “in the lead.”

In a close race, Trump and his allies argue that some “gambling polls,” as he described them last week, put him significantly ahead of Harris. “Like, 65 to 35, or something like that.”

The irony of proclaiming an apparent lead in the betting markets by a believer and ballot campaign event in Georgia targeting Christian voters was not lost on Trump. “But nobody here gambles,” he continued. “Is anybody here playing? No, no, no, no. Big Christians don’t play, do they? Oh no.”

Two line charts with blue and red lines. In the first diagram the lines are close to each other, in the second diagram they diverge, where the red line goes higher than the blue

The “gambling polls” that Trump cited are forecasts generated by several election gaming platforms that put his chances of retaking the White House significantly ahead of his Democratic rival. With many questioning the accuracy of political polling, supporters including Elon Musk, has begun to argue that such estimates are more accurate.

On Wednesday, Polymarket, a leading service, put Trump’s chances of winning back the presidency at about 67%, with Harris at 33%. Another, Kalshi, put Trump at 62% and Harris at 38%.

And while Trump’s audience last Tuesday wasn’t interested in betting on the outcome of the presidential election, it appears many others are involved. High-profile legal battles, promotion by the likes of Musk and Trump, and growing media coverage have helped thrust the activity into the spotlight as the campaign gathered steam.

Betting interest in this election is “orders of magnitude greater” than previous polls, according to Thomas Gruca, a University of Iowa marketing professor and director of Iowa Electronic Markets, an election-focused futures market first established in 1988.

America’s gambling boom, led by the legalization of sports betting, “has increased the number of people who like to throw their money at things they don’t understand,” Gruca said. “People think, ‘I picked the Raiders-Jets game, therefore I can pick a president.'”

He also pointed to polling errors in previous elections and how many polls this time around suggest the race is extremely tight. “I haven’t looked at the polls for the last 15 minutes, so I don’t know who’s going to win. In previous years, there was a lot of clarity.”

In the magazine and newspaper section of Apple’s iPhone store, Polymarket has reigned supreme in top placeand leaving the New York Times, the Wall Street Journal and, yes, the Guardian, in its wake. Another platform, Kalshi, also has rose up the store’s chart of financial apps.

“I don’t think it’s a coincidence that these markets have become more popular as trust in the media has been declining,” said Harry Crane, professor of statistics at Rutgers University. “The public wants information and is looking for sources of information they can trust.”

If you had gone to, say, Polymarket on Wednesday and bet on Trump, you would receive $1 for every 67 cents you bet if he wins the election. If you bet on Harris, on the same platform, on the same day, you will receive $1 for every 33 cents wagered if she wins.

These bets are bids on political futures contracts. Buying a contract drives its price—or the perceived likelihood of that happening—higher.

This ecosystem extends far beyond the race for the White House. Other markets at Kalshi include the margin of victory in the Senate, which state will have the closest presidential election result, and what the Federal Reserve will do with interest rates two days after the election.

But how reliable are the headlines? “I think you have to take them seriously,” said Grant Ferguson, a political scientist at Texas Christian University. “The people who bet on these markets basically think they know more than the average person about how things are going.”

Leading platforms put Hillary Clinton ahead on Election Day in 2016 (she won the popular vote if not the presidency) and Joe Biden ahead in 2020, “but by less than the polls in both cases,” Ferguson said. 2024 will be the biggest test yet of these predictions.

“By and large, these markets are actually pretty efficient — especially they’re pretty good at things that are 50:50, 60:40,” said Eric Zitzewitz, a professor of economics at Dartmouth College. “In the kind of situation we’re in right now … I take it pretty seriously.”

Assuming a market is run “efficiently or with good rules, prices before the event will reflect what the smart people are thinking and not just random people,” Gruca suggested.

Iowa Electronic Markets allows participants to bet up to $500 on any given contract, and PredictIt, which runs out of Victoria University in Wellington, New Zealand, has a limit of $850. But other platforms don’t have such tight restrictions, and big bets may have shifted the odds in Trump’s favor.

Polymarket, which did not respond to requests for an interview, confirmed last week that one person – a French national – was behind four accounts that had placed bets on Trump worth about $28 million, but insisted to the New York Times that this was “based on personal views” rather than an attempt on manipulating the market.

“Without limits,” Gruca said, “you can make prices move away from what they should be.”

If one person tries to tilt the odds against their preferred candidate, those bets would quickly back the other if their odds fell too low, Ferguson suggested. “Is it likely to happen? Yes,” he said. “But I’m not really worried about that.”

There is a small but significant difference to the question at the heart of polling and election betting. While poll respondents indicate which candidate they lack in order to win, those who play on the competition say who they think will. Veterans of the space like to say that pollsters focus on their hearts and players use their heads.

Betting markets “ask the more relevant question,” Crane argued. “The poll information is in the markets. The people who are in the markets know what the polls are, but they have different information.”

The regulators are not happy. Commodity Futures Trading Commission, which Polymarket fined DKK 1.4 million. USD in 2022 and ordered it to bar US users as part of a settlement, has tried to shut down PredictIt and Kalshi.

But Kalshi was recently cleared to take bets on US election results when a federal appeals court ruled that the CFTC had failed to show how the agency or the public interest would be harmed by its arrangement agreements.

While the CFTC is attractivethe legal breakthrough appears to have set the stage for a further increase in bets placed on who will prevail in the presidential campaign – by both individual betters and large institutions. Polymarket also examines activity on its platform to ensure that users are located outside the United States reports of household use.

“Markets are only as smart as the people who trade them,” Gruca said. “If you’re dumb as a rock and have a lot of money, you can move the markets in any direction you want just by moving money.”