Polymarket Saw Trump’s Win Coming. What’s Next for Online Prediction Markets?

President-elect Donald Trump wasn’t the only one declaring victory on Wednesday. So were the online betting markets that forecast his election victory.

As polls began closing on Tuesday evening, Polymarket, the world’s largest prediction market, put the odds of a Trump victory at about 58%. His odds shot up as the night went on, reaching 95% at 11:43 p.m. ET, nearly six hours before the Associated Press called the election.

“I just got word that the Trump campaign HQ literally found out they were winning from Polymarket,” wrote the platform’s founder and CEO, Shayne Coplan, on X early Wednesday morning.

Trump had a commanding lead over Vice President Kamala Harris in prediction markets in the month leading up to Tuesday’s election. At one point, the market put his odds of victory at 67% to Harris’s 33%. Conventional polls, meanwhile, showed neither candidate with a lead greater than the margin of error in any key swing state. 

Outcome a ‘Vindication’ of Betting Markets

Coplan told CNBC on Thursday morning that the outcome was a “vindication” of the predictive power of his platform, which he called “the most accurate way to follow the election.”

This was the first U.S. election in which Americans were able to place bets on the outcome. In early October, a federal court sided with prediction market Kalshi in its lawsuit against regulators who had blocked the market from offering event contracts. That ruling opened the door for Kalshi and other prediction markets to offer election contracts.

Brokers entered the fray, too. Interactive Brokers (IBKR) and Robinhood (HOOD) each launched election betting markets last month; Interactive Brokers this week said that more than 220 million contracts had been placed on the presidential election as of the end of Tuesday.

Election betting has faced backlash from regulators, who earlier this year proposed a rule that would explicitly prohibit the trading of election contracts — and from election watchers who cited concern that market participants could seek to influence an election for financial gain. Regulators have appealed last month’s ruling in favor of Kalshi.

Coplan said criticism of Polymarket, especially claims that a few big bettors can have outsized influence on odds, was “unfounded” and “based on misinterpretations of what Polymarket was.”

“It’s all peer-to-peer,” he said. “If someone takes a really big position on Trump, for example … there’s also a really big position being taken on Harris.” 

The Future of U.S. Political Betting

Coplan said he’s hopeful that the outcome of this election could move public opinion. “I understand that it’s a novel concept and people were skeptical when it came around. But hopefully now people will be a lot more embracing of market-based information,” he said. 

Polymarket traders placed bets worth nearly $3.7 billion on the presidential election. Yet the platform isn’t available to U.S. residents. Coplan on Thursday said expanding to the U.S. was “part of the plan.”

The incoming Trump administration is likely to be friendlier to Polymarket and other prediction markets than Biden’s has been. Polymarket operates on blockchain technology and is most popular with cryptocurrency enthusiasts. Trump has embraced that community, promising to end the Securities and Exchange Commission’s “anti-crypto crusade” and launch a national crypto stockpile, while also promising to roll back financial sector regulations.