U.S. Election Betting: Kalshi’s Polymarket Rival Quickly Gets Traction

This
week
in
prediction
markets:

This
U.S.
election
cycle
will
be
over
in
two
weeks.
For
some,
it
will
be
a
sigh
of
relief.
But
prediction
market
platforms
are
having
the
time
of
their
lives.

The
market
gives
Republican
nominee
Donald
Trump
a
14
percentage
point
lead
over
his
Democratic
rival
Kamala
Harris.
These
odds
must
come
solely
from
U.S.
nationals
(and
permanent
residents),
because
Kalshi’s
terms
and
conditions
prohibit
foreign
nationals
from
trading
on
the
platform.

By
contrast,
the
industry
leader
Polymarket

prohibits
U.S
traders
from
the
platform
but
does
not
require
a
know-your-customer
process
to
validate
who
is
who.
Polymarket’s
bets
are
denominated
in
cryptocurrency,
whereas
Kalshi’s
are
settled
in
regular
dollars.

Initially,
some
might
have
thought
that
Kalshi
was
coming
to
market
with
a
handicap,
because
it’s
regulated.
But
this
has
allowed
the
platform
to

escape
the
allegations
of
market
manipulation
by
shadowy,
possibly
foreign,
dark
money
that
have
dogged
Polymarket.

Instead,
Kalshi
created
a
rebuttal
to
such
accusations
for
its
much
larger
competitor.

In
a
thread
on
X
(formerly
Twitter),
Tarek
Mansour,
Kalshi’s
co-founder,
outlined
how
market
manipulation
falls
flat
on
his
platform,
where,
as
on
Polymarket,
Trump
leads
with
a
commanding
margin.

“The
median
bet
size
on
Harris
is
LARGER
than
the
median
bet
size
on
Donald
Trump,”
he
wrote.
“Trump’s
odds
are
not
the
result
of
a
few
people
pushing
the
odds
up.
It’s
the
opposite.”

Looking
through
Dune,

a
crypto
analytics
portal
(Kalshi
wouldn’t
be
on
Dune
as
it’s
not
a
crypto
platform),
the
bet
size
numbers
aren’t
too
far
off
on
Polymarket.

Data
shows
that
overall
on
the
site
the
median
betting
size
is
between
$10
and
$50.

Now,
for
Polymarket’s

presidential
election
contract,
median
data
isn’t
immediately
available
on
Dune.
The
next
best
thing
is
the
average
bet
size
(remember
the

difference
between
average
and
median)
which
comes
in
at
$210
for
Trump
and
$113
for
Harris.

Going
back
to
the
overall
Polymarket
platform,
the
number
of
users
who
have
placed
bets
above
$100,000
is
only
27
–
while
there
are
over
220,000
users
on
the
platform.

Some
of
those
27
users
are
placing
$20
million-plus
bets
that
are
bound
to
put
pressure
on
markets.
But
the
fact
that
Polymarket’s
numbers
are
in
line
with
Kalshi’s
on
Trump
suggests
that
these
whales
aren’t
having
the
effect
that
critics
of
prediction
markets
think
they
are.

Sometime
between
launching
a
crypto
token
that’s
off
to
a
rocky
start
and

working
a
shift
at
McDonald’s
(the
employer
of
last
resort
for
failed
crypto
bros)
Trump
name-dropped
Polymarket
at
a
rally,
calling
it
“Polypoll.”

This
isn’t
the
first
time
the
Republican
candidate
has
acknowledged
Polymarket,
as
his
team
posted
favorable
odds
on
his
Truth
Social
page
during
his
first
surge
this
summer.

While
Polymarket’s
election
contract
has

Trump
well
ahead
of
his
Democratic
rival
at
62-37,
some
of
the
numbers
aren’t
adding
up.

Individual
state-level
contracts
have
Trump
winning
every
swing
state,
even
Nevada,
with
a
healthy
margin.

But
a
contract
asking
if
he’ll
win
every
swing
state
is
coming
in
at
just

32%
on
the
”yes“
side.

The
largest
holder
on
the
“no”
side,
who
goes
by
the
handle
“AntiMaga,”
has
$5
million
in
positions,
largely
taking
the
“no”
side
on
Trump
or
Republican-related
contracts.

Meanwhile,
the
largest
holder
on
the
other
side
of
the
bet,

Yeueu,
is
holding
much
less
in
terms
of
positions
overall,
but
is
up
88%
on
the
swing
state
contract.

All
of
this
is
a
reminder
that
markets
aren’t
perfect,
and
inefficiencies
exist
–
or
arbitrage
opportunities,
depending
on
your
perspective.