Markets predicting US elections are causing concern among experts due to misinformation.

The United States midterm elections are taking place at a time of expansion in prediction markets, digital platforms where users can bet money on the outcomes of events, including electoral contests. The growth of these tools worries experts, who warn of the risks of misinformation and misinterpretations of the election results.

According to G1 Economia, platforms like Polymarket and Kalshi allow users to trade contracts whose value depends on election results. Research indicates that most Americans are against betting on elections, but the estimates released by these platforms have already become part of the coverage of major media outlets.

In Brazil, the issue was regulated before the midterms. A resolution from the National Monetary Council (CMN) prohibited, starting in May 2026, the offering of contracts linked to election results and other events unrelated to economic and financial indicators. The measure also led to the blocking of Polymarket and Kalshi in the country.

Odds vs. Outcomes

Experts warn that the percentages displayed on these platforms can be mistaken for definitive results, not estimates. Davina Hurt, director of government ethics at the Markkula Center for Applied Ethics at Santa Clara University, believes that these tools have already become central to how the American electorate follows elections.

“They have become increasingly part of how Americans understand elections,” Hurt stated. According to her, “we are reaching a point where the expectations of the financial markets carry more weight in the public mind than the votes themselves.”

There is also the risk that a divergence between market predictions and the actual election results could be interpreted as evidence of electoral fraud, even without any irregularities. Hurt emphasizes that high probabilities do not equate to certainties. “A high probability is not a promise. When a prediction turns out to be wrong, it doesn't mean the choice was wrong. However, people will interpret it that way,” he said.

Kalshi itself acknowledges that the probabilities it publishes do not guarantee results. The company argues that attempts to manipulate the estimates tend to be offset by the trading of other users on the platform. Elisabeth Diana, Kalshi's communications director, told AFP that "Kalshi should be seen as a complement to traditional polling."

The Los Angeles case

An episode in the Los Angeles mayoral primary elections in June illustrated the risks pointed out by experts. After the defeat of Republican Spencer Pratt, right-wing influencers made accusations of electoral fraud based on platform estimates indicating the candidate's chances of advancing to the general election. Some of the posts with false information on social network X appeared identified as "paid partnerships."

Michael Sánchez, spokesperson for the Los Angeles County Election Registration Office, assessed that “the June primary showed how expectations about an election can be confused with the results.” This episode led Polymarket and Kalshi to take measures regarding the dissemination of this type of content.

In a document obtained exclusively by AFP, Kalshi instructed its partners not to question official election results without foundation. According to the document, partners “should not question the integrity or accuracy of any official vote count result, judicial decision, or other official or formal determination related to the electoral process.” The company also stated that it will terminate contracts with partners who make unsubstantiated accusations that an election result was manipulated, rigged, or compromised. Polymarket did not respond to requests for comment.

Regulation under debate

Prediction markets still face legal disputes in the US over which rules they should follow; the central discussion is whether these platforms should be regulated like commodity markets or subject to gambling laws.

Jared DeMarinis, responsible for administering elections in the state of Maryland, requested an evaluation of the legality of betting linked to electoral disputes in his state. In an interview with AFP, he also prohibited poll workers from betting on election results. "Now they've simply added fuel to the fire by involving money in this. The last thing we want is for the legitimacy of the result to be called into question," DeMarinis stated.