More than 87% of all election markets across Kalshi and Polymarket gave the right candidate at least a 90% chance of winning their race 24 hours before election night, a CNBC analysis found.
Election night showed how traders reacted to real time midterm results, as trading activity surged and market prices shifted to Democrats after results from Indiana began rolling in before 7 p.m. on Nov. 3. Many midterm races were uncompetitive, which boosted the overall hit rate on prediction markets.
"I'd say prediction markets did pretty well," said Koleman Strumpf, a professor of economics at Wake Forest University. "But they didn't outperform the best," he added, referring to traditional forecast polls that tracked results that night.
Odds and gambling platforms do not use methodologies used by traditional political polling, and therefore are not substitutes for political polls.
After 8 p.m. on Nov. 3, at least $1 million was traded on a Kalshi market that incumbent Gov. Greg Abbott would be reelected. Abbott eventually lost to Democrat Gina Hinojosa by more than 700,000 votes, according to the Associated Press. A little after 11 p.m. on election night, more than $1.4 million was traded on Kalshi that Republicans would not secure control of the House of Representatives.