2026 elections could test how prediction-market trading affects races and results

Prediction markets are moving from the margins of election season into the center of a growing fight over American democracy. Trading on races, including some of this fall’s biggest contests, has surged as states seek to outlaw platforms such as Kalshi and Polymarket as unlicensed casinos.

The concern among election administrators is not limited to whether the contracts amount to gambling. They are also watching what happens when financial stakes become intertwined with real-world elections. Officials who have spent years battling misinformation and conspiracy theories fear that Americans could lose even more confidence in election results if they believe traders are helping influence the outcome.

“This is a troubling trend that election administrators across the nation must deal with,” said Jared DeMarinis, administrator of the Maryland State Board of Elections.

Kalshi, Polymarket and similar platforms let users buy and sell contracts linked to the probable outcome of an event. Contracts generally cost between 1 and 99 cents, and users can trade on mayoral, gubernatorial and U.S. Senate races. The expansion comes as President Donald Trump pushes broad changes to voter identification and mail voting procedures, based on his false claims of widespread mail-voting fraud and voting by noncitizens.

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This is a troubling trend that election administrators across the nation must deal with.

The platforms reject the idea that their activity threatens elections. Their officials say trading before an election is little different from buying stocks, bonds or commodities to hedge against the effect a future winner’s policies could have on investments or businesses. “One can make the argument that the entire stock market, at some level, is affected by elections and outcomes,” said Joshua Mitts, a Columbia Law School professor who studies corporate and securities law.

The companies also point to federal insider-trading protections. Kalshi said it suspended and fined North Carolina congressional candidate Laurie Buckhout for three years after disclosing that she traded on her own race. Kalshi says its research shows that markets closely track outcomes, with events assigned a 60% chance occurring nearly 60% of the time. The company argues that traders seeking profits help counter attempts to manipulate prices.

Yet the markets have also suffered notable setbacks this year. In one example, they strongly favored a candidate who lost a Wisconsin primary. The 2026 elections will provide a larger test of whether these markets merely reflect political expectations or begin to shape them.

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One can make the argument that the entire stock market, at some level, is affected by elections and outcomes.