WASHINGTON — More than $1.4 billion has been traded on prediction markets tied to the 2026 midterm elections, marking a major expansion of an industry that allows investors to wager on political outcomes and other real-world events.
The trading surge, reported Friday by CNN, comes as voters prepare for the Nov. 3 elections that will determine control of Congress and dozens of governorships across the country.
Kalshi, one of the largest U.S. prediction market operators, has recorded nearly $1.1 billion in trading volume related to the midterms. Rival Polymarket has generated more than $340 million, including activity on its U.S. platform and international exchange.
The figures represent trading activity rather than the total amount of money individual investors have committed to election outcomes. Contracts can change hands multiple times before an election, increasing reported volume.
Prediction markets allow participants to buy and sell contracts based on whether specific events will occur. In political markets, contracts can cover which candidate wins an election, which party controls Congress or whether a particular campaign event takes place.
Prices fluctuate based on trading activity and are often interpreted as market-implied probabilities, although those prices do not guarantee an outcome.
The industry has expanded rapidly since the 2024 presidential election, when political prediction markets gained wider public attention.
The 2026 midterms have attracted substantially more activity, with traders placing money on individual House and Senate races, voter turnout, gubernatorial contests and other political developments.
Some markets go beyond election winners to cover candidate endorsements, debate appearances and statements made during campaign events.
The expansion has drawn interest from investors, political strategists and news organizations seeking additional measures of public expectations beyond traditional polling.
Supporters argue that prediction markets can provide useful information because participants have financial incentives to assess outcomes accurately.
Trading could increase further as Election Day approaches, particularly as election results begin arriving and market prices adjust to new information.
However, the industry’s growth has also raised questions about market manipulation, insider trading and the reliability of contracts with limited trading activity.
Unlike traditional public opinion polls, prediction markets do not measure the preferences of a representative sample of voters. Their prices reflect the decisions of participants willing to trade, and individual contracts can be influenced by large investors or relatively small amounts of activity.
Federal regulators have increased scrutiny of political trading, particularly when individuals associated with campaigns could possess information unavailable to the public.
Kalshi has suspended six candidates during the 2026 election cycle for improperly trading on their own races, according to CNN.
The Commodity Futures Trading Commission has also been examining rules governing event contracts, including political markets.
The regulatory debate intensified following the 2024 election, when federal courts allowed election-related contracts to operate despite earlier government efforts to restrict them.
The Trump administration has taken a more favorable approach toward prediction markets, while regulators continue considering safeguards against improper trading.
Other companies are seeking to expand their presence in the industry.
ForecastEx, a prediction market exchange owned by Interactive Brokers, has reported more than $6.4 million in trading activity related to the midterms, according to CNN.
PredictIt, which has operated political prediction markets since 2014, has also reported increased interest but has not disclosed its total 2026 trading volume.
The industry’s expansion comes as financial companies increasingly explore event-based contracts covering everything from economic indicators and weather to entertainment and sports.
For the election industry, the rapid growth creates a new source of information about political expectations while raising questions about the influence of financial speculation on campaigns.
Although more than $1.4 billion has already changed hands in midterm-related trading, election contracts remain a relatively small share of the broader prediction market industry.