It’s not uncommon to come across news outlets citing statistics. Still, data predicting the projected number of tweets from Donald Trump between Sept. 20 and 27 or the likelihood of the US confirming the existence of aliens by the year’s end sounds a bit niche.
How is it that CNN was able to obtain specific stats prior to the presidential debate on the likelihood that each candidate would shake hands, speak more, or gain popularity following the discussion? Let me introduce you to something your crypto-loving finance boyfriend has been gatekeeping: prediction markets.
Described by Polymarket CEO Shayne Coplan as “the future of news,” a prediction market is an online platform where international users can place real-time bets on future events’ outcomes.
For example, if you believe Travis Kelce will propose to Taylor Swift before the end of the year, you can buy shares supporting that idea. If others in the market think there’s a 70% chance of this happening, each share will cost 70 cents. With a $10 investment in this claim, you’d purchase about 14 shares. If this reality manifests, you’d earn back $1 for each share, or $14. This would give you a 42% return on your investment.
Conversely, if you don’t believe the proposal will happen, you can purchase shares opposing this claim at 30 cents. If this prediction is correct, you stand to make a much larger return—about $33.33 on a $10 investment—because you would receive $1 for each share you bought.
Although the Commodity Futures Trading Commission (CFTC) prohibits U.S. citizens from betting on presidential elections, the data itself is a revolutionary resource for news consumption due to its extreme accuracy.
According to U.S. News, prediction markets proved their value when Iowa Electronic Markets more accurately predicted the outcome of the 2004 presidential election than professional polling organizations.
U.S. News attributes this to the markets’ incentives: users want to win money, so they will use the information available to make a correct prediction. Mix the potential earnings with a massive, diverse population, and you have a recipe for what sociologists call the “Wisdom of the crowds.” This concept suggests that the collective intelligence of a large group surpasses that of individual specialists, according to Investopedia.
Wellington Zeraus, a digital investor and long-term user of prediction markets, describes them as a great resource for gaining insight into particular trading patterns.
“I try not to be guided too much by the news,” Zeraus said. “I like to go more by algorithms.”
Polymarket
“Traditional sites like Wikipedia, for example, you go there to get yesterday’s news. You go there to learn about history. With Polymarket, you can get tomorrow’s news today.
William LeGate
Founded in 2020, Polymarket is a prediction market that enables users to forecast the outcomes of events before they occur. This capability has been demonstrated multiple times during this election cycle.
William LeGate, leader of marketing and growth at Polymarket, explains that traditional political polls are only a snapshot in time and can take days to accurately reflect public sentiment following events like the presidential debate, whereas Polymarket’s data updates constantly.
The market’s data demonstrated real-time probabilities of President Biden dropping out of the race, with a 66% probability increase from 23% between June 26 and July 18. When he dropped out, Polymarket clocked in at a near 90% chance of Biden ending his campaign, according to a screenshot captured by X user Antonio GarcĂa MartĂnez.
Following the historic prediction, X user Jason Kim wrote, “2008 was the Facebook Election. 2016 was the Twitter Election. 2024 is the Polymarket Election.”
Additionally, the market correctly predicted Trump’s VP pick of JD Vance at a 70% chance and has documented Harris’ rise from a 6% chance of winning the election in June to 51% today.
During the presidential debate on Sept. 10, users could see each candidate’s favorability fluctuate in real time.
“When Trump mentioned that immigrants are eating dogs and cats, you could actually see the tangible impact on his electability because it’s immediately reflected in our market odds,” said LeGate. “This allows you to attribute changes to a specific event on a cadence that otherwise would not be possible.”
If we can predict the future, who will win this election?
According to Polymarket’s data, as of Sept. 24, Harris has a higher chance of winning the presidency, but only by less than two percentage points. These percentages vary slightly every day, which is expected in such a tight election.
Because this election is so close, swing states will play a vital role in determining the next President of the United States. According to Polymarket’s data, the current swing states are Nevada, Pennsylvania, Wisconsin, North Carolina, Michigan, Arizona, and Georgia. Between these seven, The New York Times narrowed it down to Pennsylvania, Wisconsin, North Carolina, and Georgia as the most instrumental states needed to secure the presidency.
The winning candidate must have 270 electoral votes. Below are statistics from Polymarket showing how each state is leaning as of Sept. 24.
- Pennsylvania: 19 Electoral votes
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Polymarket - Wisconsin: 10 electoral votes
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Polymarket - North Carolina: 16 electoral votes
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Polymarket - Georgia: 16 electoral votes
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Polymarket
Even though the perceived volatility can be nerve-racking, it’s a testament to Polymarket’s mission: to provide highly accurate predictions to the general public.
“It’s our platform reacting to what’s happening right now,” LeGate said. “So when something big goes down—a debate, a major news story—you’ll see quick shifts in the market, which is expected.”
Even though the candidates are neck and neck in their odds of winning the presidency, Harris is leading the popular vote by 75%.
According to LeGate, access to this data helps the public stay politically informed without worrying about consuming biased information.
However, a valid criticism of these markets would be what demographics dominate the platform and how that affects their data. We typically associate topics like finance and cryptocurrency with middle-to-upper-class men, and according to Similar Web, this assumption does not appear too far off.
Similar Web states that 74% of Polymarket’s users are male, and 34% are between the ages of 25 and 34. Although this isn’t enough information to assume a political preference, in the event the market’s leading demographics had political biases, LeGate states the system is self-correcting.
When a specific candidate is overvalued at, say, 80%, the odds this candidate does not win become cheaper, at 20 cents per share. This leads to a much higher investment return opportunity for those betting that this candidate will not win the election. By contrast, it becomes more expensive to continue to buy shares supporting this candidate.
“The natural incentives of the ecosystem encourage the market to self-correct as it becomes cheaper and cheaper to bet on the other side,” LeGate said. “Then everyone finds that consensus at a price or odds that everyone agrees with, which becomes the market price of the market odds.”
Enough gatekeeping
As Polymarket is a predominantly male platform, the involvement of young adult women is essential to ensure we stay informed. Leveraging the data and research the markets provide opens up invaluable opportunities for our personal development and career goals. It also keeps us a step ahead of the competition.
According to LeGate, Polymarket aims to diversify its user base by partnering with various influencers to market its resources to multiple demographics. Unless they’re in the political or finance worlds, the general public is primarily unaware that forecasting platforms like Polymarket exist, which puts them at a disadvantage. Introducing this new world of information to people who would otherwise be unaware of its existence is vital in ensuring the public has the tools needed to make better-informed decisions for themselves, their families, and their futures.
“Our goal of connecting with influencers is to expand the reach of the knowledge we provide about the future and not have it gatekept by some financial bros on Wall Street and, instead, democratize this information globally.”
William LeGate