Coming to an election near you: prediction markets

Arrests for betting on the U.S. military operation that removed Venezuelan leader Nicolás Maduro. Death threats from gamblers to a journalist reporting on an Iranian missile attack on Israel. Fears of government officials manipulating world events – including the Iran war – to make a quick buck. These are some of many concerns that experts have raised about how prediction markets – online marketplaces that allow people to bet on world events – might be affecting national security in the U.S. and abroad. But prediction markets may not be only influencing international affairs. They could also affect the 2026 midterm elections. We are social scientists who study gambling, public policy and national security. Here are four things you need to know about how prediction markets may be changing American politics: The Kalshi market wager ‘Will Iran effectively close the Strait of Hormuz for 7+ days?’ appears on a smartphone screen on March 9, 2026. Nikolas Kokovlis/NurPhoto via Getty Images Prediction markets turn politics into a game Prediction markets offer people the opportunity to bet on political events by purchasing “shares” – like stock in a company – of different potential outcomes. If an outcome takes place, the market pays out for each share purchased by those who guessed correctly. More betting activity in favor of an outcome raises its price and lowers its payout, and vice versa. Prediction markets are different from casinos and online sportsbooks because there is no “house” – like a casino – that determines the size of the payout for correctly guessing who will win or lose a sporting event. In a prediction market, players “bet” against one another, not the house. The markets make money by charging transaction fees on each trade. Betting on prediction markets allows users to turn many aspects of U.S. politics into a game. For example, betting on election outcomes is very popular on prediction markets. Kalshi – a popular prediction market platform – has a portion