Midterm elections 2026: Why Kalshi and Polymarket election betting declines as sports and crypto take over

Prediction markets have expanded rapidly since the 2024 US presidential election, but political betting is no longer driving the industry’s growth. Sports and cryptocurrency have taken a larger role, while interest in election-related trading has cooled ahead of the 2026 midterms.

An analysis by Bloomberg found that prediction market trading volume has grown more than 20-fold since October 2024. Yet politics accounted for just 1% of monthly trading volume on Kalshi and Polymarket last month, compared with about two-thirds during the 2024 presidential election.

The shift comes as platforms that once attracted widespread attention for their forecasts of the presidential race increasingly compete for traders interested in other events.

Sports and crypto are driving prediction-market Kalshi and Polymarket growth

Sports has become a major draw for prediction-market users, with cryptocurrency also contributing to activity. On Kalshi, about 99% of trading volume in combination bets, or parlays, comes from sports, according to the Bloomberg analysis.

The broader expansion of these platforms has not translated into a comparable increase in election trading. Kalshi’s election-related trading during the final week before the 2026 midterms was almost in line with the comparable period before the 2024 election. But Polymarket recorded a significant decline in election trading across its US and international platforms.

US midterm elections: Congressional control attracts more trading than individual races

Traders have focused heavily on which party will control Congress, rather than placing money on individual House contests.

The Texas Senate race was Kalshi’s most heavily traded individual race, with about $79 million in volume as of Monday, according to the analysis. Markets tied to congressional control and the balance of power had attracted $277 million.

Trading was far less substantial across most individual House races, with only five exceeding $1 million in volume.

The concentration of activity raises questions about how much confidence should be placed in the odds attached to less-traded contests.

Researchers raise concerns about market manipulation over election results

A report published Monday by the Anti-Corruption Data Collective raised concerns about how easily prices in election-related markets could be moved. Its analysis found that a few thousand dollars could meaningfully shift prices in almost all midterm-related markets because of limited liquidity.

Kalshi spokesperson Jack Such disputed the findings, calling them “baseless,” as quoted by Bloomberg. He explained that manipulating the markets would cost considerably more and maintained that the platform’s markets remain calibrated.

Legal and media scrutiny continues of Kalshi and Polymarket

Kalshi’s entry into US election betting followed a federal court decision shortly before the 2024 presidential election that allowed it to list election markets. The platform is now regulated in the US, and Bloomberg’s analysis found that it processes substantially more weekly notional trading volume than Polymarket’s US and international venues combined.

Prediction markets have also become more visible in news coverage, with media outlets featuring their odds alongside traditional election analysis. But experts have warned that audiences may not fully understand how market-based probabilities differ from polling results.

The platforms also face legal challenges from dozens of states that accuse them of trying to bypass state gambling laws.