Opinion polls show that Harris and Trump are in a close race. “Gambling surveys” say otherwise | Business

MMost gamblers may want to sit out the US elections. According to official polls, it is too close to be in a neck-and-neck race with Kamala Harris and Donald Trump. But the former president's campaign has seized on signs that he says prove he is indeed a “leader.”

In a tight race, Trump and his allies claim that some “gambling polls,” as he described them last week, put him well ahead of Harris. “About 65 to 35 or something like that.”

The irony of touting an apparent advantage in the betting markets at a Believers and Ballots campaign rally in Georgia aimed at Christian voters was not lost on Trump. “But no one plays here,” he continued. “Is anyone playing here? No, no, no, no. Great Christians don't play games, do they? Oh no.”

The “gambling polls” cited by Trump are forecasts from several election betting platforms that put his chances of retaking the White House well above those of his Democratic rival. As many question the accuracy of political polls, advocates including Elon Musk claim that such estimates are more accurate.

On Wednesday, Polymarket, a leading service, put Trump's chances of winning back the presidency at about 67% and Harris's at 33%. Another, Kalshi, put Trump at 62% and Harris at 38%.

And while Trump's audience had no interest in betting on the outcome of the presidential election last Tuesday, many others appear to be getting into it. High-profile legal battles, endorsements from the likes of Musk and Trump, and increasing media coverage have helped bring the activity into the spotlight as the campaign gained momentum.

According to Thomas Gruca, a professor of marketing at the University of Iowa and director of Iowa Electronic Markets, an election-focused futures market first founded in 1988, interest in betting on this election is “orders of magnitude greater” than previous cycles.

America's gambling boom, led by the legalization of sports betting, “has increased the number of people who are happy to waste their money on things they don't understand,” Gruca said. “People think, 'I picked the Raiders-Jets game, so I can pick a president.'”

He also pointed to opinion polls in previous elections and how many polls this time suggest the contest is extremely close. “I haven't looked at the polls in the last 15 minutes, so I don't know who will win. There has been a lot of clarity in the last few years.”

In the magazines and newspapers section of Apple's iPhone Store, Polymarket has come out on top, leaving behind the New York Times, the Wall Street Journal and, yes, the Guardian. Another platform, Kalshi, has also catapulted up the store's list of financial apps.

“I don’t think it’s a coincidence that these markets are becoming more popular as trust in the media declines,” said Harry Crane, a professor of statistics at Rutgers University. “The public wants information and is looking for sources of information they can trust.”

For example, if you had turned to Polymarket on Wednesday and bet on Trump, you would receive $1 for every 67 cents you wagered if he won the election. If you bet on Harris on the same platform and on the same day, you will receive $1 for every 33 cents you bet if she wins.

These bets are bids on political futures contracts. Buying a contract increases its price – or the perceived likelihood of it coming to fruition.

This ecosystem extends far beyond the race for the White House. Other markets on Kalshi These include the margin of victory in the Senate, which state will have the best result in the presidential election and what the Federal Reserve will do with interest rates two days after the election.

But how reliable are the headlines? “I think they should be taken seriously,” said Grant Ferguson, a political scientist at Texas Christian University. “People who bet on these markets largely believe they know more than average about how things work.”

Leading platforms had Hillary Clinton leading on Election Day in 2016 (winning the popular vote, if not the presidency), and Joe Biden leading in 2020, “though in both cases by less than the polls' margin.” Ferguson said. 2024 will be the biggest test yet of these predictions.

“By and large, these markets are actually pretty efficient — in particular, they're pretty good at things that are 50:50, 60:40,” said Eric Zitzewitz, a professor of economics at Dartmouth College. “In the situation we're in right now… I'm taking this pretty seriously.”

Provided a market is run “efficiently or with good rules, pre-event prices reflect what the smart people are thinking and not just random people,” Gruca suggested.

At Iowa Electronic Markets, participants can bet up to $500 on a given contract, and at PredictIt, operated by Victoria University in Wellington, New Zealand, the limit is $850. But other platforms don't have such strict restrictions, and big bets may have tipped the odds in Trump's favor.

Polymarket, which did not respond to interview requests, confirmed last week that one person – a French citizen – was behind four accounts that had placed about $28 million worth of bets on Trump, but insisted to The New York Times that this is “based on…” “personal views” and not an attempt to manipulate the market.

“Without limits,” Gruca said, “prices can deviate from what they should be.”

If one person tries to tilt the odds toward their preferred candidate, bettors would quickly back the other person if their odds became too low, Ferguson suggested. “Is that likely to happen? Yes,” he said. “But I’m not really worried about it.”

There is a small but significant difference between the core question of election polls and election betting. While poll participants indicate which candidate they are voting for want To win, those who enter the competition say who they are think Will. Veterans in the field like to say that poll takers focus on their hearts and bettors focus on their heads.

The betting markets “ask the more relevant question,” Crane argued. “The survey data is available in the markets. The people who are in the markets know the surveys, but they have different information.”

Regulators are not happy. The Commodity Futures Trading Commission, which fined Polymarket $1.4 million in 2022 and ordered it to ban U.S. users as part of a settlement, has sought to shut down PredictIt and Kalshi.

However, Kalshi was recently granted permission to accept US election outcome bets when a federal appeals court ruled that the CFTC had failed to demonstrate how the agency or the public interest would be harmed by its event contracts.

As the CFTC appeals, the legal breakthrough appears to have set the stage for a further surge in betting on who will win the presidential election – both by individual contenders and large institutions. Polymarket is also reviewing activity on its platform to ensure users are located outside the US as there are reports of domestic usage.

“Markets are only as intelligent as the people who trade in them,” Gruca said. “If you're stupid and have a lot of money, you can move the markets in any direction you want just by moving money.”