With Election Day approaching, prediction market election integrity risks remain
On the eve of the 2026 midterm elections, new analysis by the Anti-Corruption Data Collective warns that many of the concerns raised by the non-profit’s ‘Gambling on Democracy’ series remain in place. With data current to 29 October, the group finds that over $431M has been bet on congressional midterm election prediction markets. The three major platforms – Kalshi, Polymarket and Polymarket US – have opened over 28,845 markets on congressional races. Amidst this unprecedented volume and breadth of gambling on midterm elections, ACDC finds:
Risks of insider trading remain and are becoming more pronounced in the fina stretch of campaigns, as campaign appearances and endorsements gather pace. The total volume wagered on midterms markets classified as ‘knowable’ has reached $25.5M.
Price manipulation and misinformation risks continue to be a concern, even as more liquidity enters many markets. Across the 15,985 congressional markets with live order books, 96% can be moved five cents for $3,500 or less.
In 90% of congressional races, even the most expensive-to-move markets cost less than $25,000 to move five cents.
On Polymarket, the share of volume controlled by the top 1% of wallets is increasing, reaching 75% in the latest analysis.
Additionally, ACDC finds that markets on fringe and outsider midterms candidates are attracting trading behavior indicative of wash-trading or money laundering. ACDC found 544 separate wallets on Polymarket making 591 low-stakes round trips in 22 markets. $618,395 moved through these suspicious transactions, with a total profit of just $34. Wired recently reported that the presidential elections in Ethiopia saw $284 million traded on losing candidates on Polymarket, exclusively between pairs of accounts, with each trade making no significant loss or profit.
The new briefing cites other media reporting to show that the risks observed in U.S. races are appearing on electoral markets around the world. Concerns over insider trading on elections have arisen in Portugal and, most recently, Israel, for example. ACDC’s analysis finds that the major platforms offer markets on elections in several countries where local regulators have banned them.
ACDC warns that, conversely, malign foreign actors can participate in markets on U.S. elections, potentially exploiting price manipulation vulnerabilities to sow confusion and undermine trust in the democratic process.
Michelle Kendler-Kretsch, research fellow at ACDC, said:
“Under the right circumstances, prediction markets can produce reliable probabilities on electoral outcomes. But, our final analysis before the midterms shows that these conditions continue to be unmet in a worryingly large proportion of markets. As the counts start to come in tomorrow, the public and the media should remember that prediction market probabilities are susceptible to manipulation and should not be taken as infallible.”
As recently reported by CNBC, ACDC has found that markets on Spencer Pratt’s campaign for LA Mayor repeatedly defied negative polling and news about his candidacy, rebounding after an initial dip in probabilities. Some online influencers later cited prediction market prices to question the veracity of election results.
David Szakonyi, Co-Founder of ACDC, said:
“For months now, we’ve seen that the major prediction market platforms are taking advantage of a unique regulatory window to go all–in on the midterms. This strategy has created all kinds of risks, from campaign insiders profiting on non-public information, to malign domestic or foreign actors shifting prices to favour particular candidates or generally sow distrust in the democratic process. Legislation to assign jurisdiction over prediction markets to the states would go a long way towards banning gambling on U.S. elections, which should be a priority for the new Congress – whoever holds the majority.”
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NOTES
Download the full briefing: “Gambling on Democracy — Briefing 4: A Midterms Update and the Global Picture.”
Visit the Gambling on Democracy dashboard for the latest data and previous editions in the series: https://acdatacollective.org/work/gambling-on-democracy
About ACDC
The Anti-Corruption Data Collective (ACDC) leverages public and private data to expose transnational corruption, illicit financial activity and corporate opacity. Our research and investigations seek to document and reduce the harms that corruption causes to human security, democratic participation and environmental sustainability: to people, politics and planet.
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