As the crucial midterm elections approach, political leaders across the United States are marking Tuesday's vote as one of the most significant in years, with the power dynamics in Congress hanging in the balance.
Currently, prediction markets show the Democratic Party in a favorable position to reclaim control of the Senate. As of 9 a.m. ET, Kalshi indicated a 75% likelihood of a Democratic sweep in both the Senate and the House of Representatives. In other scenarios, the chances of a split outcome—with Democrats winning the House while Republicans secure the Senate—stand at just 20%. Notably, the contract has seen a notional volume surpassing $107.8 million.
Similar sentiment is reflected on Polymarket and DraftKings Predictions. On Polymarket’s US platform, traders project a 77% probability of Democrats winning the Senate, while its offshore site places those odds slightly higher at 78%.
DraftKings Predictions also indicates confidence for the Democrats, with a 76% chance of the party capturing at least 51 seats—the number necessary to regain control of the chamber. On the same platform, the odds of a Republican victory linger around 27%, highlighting the Democrats' expected return to power in the House, with prediction market odds exceeding 90%.
The sharp increase in trading concerning election contracts has been a prominent discussion point at recent prediction market conferences, including Predict 2026 and NEXTPredict. At NEXTPredict, held at Hudson Yards in Manhattan, former Meet The Press moderator Chuck Todd warned retail traders to monitor exit polling closely on Election Night, as inexperience could lead to significant losses.
Additionally, the conferences discussed the rising interest in "multi-step conditional contracts," which require a specific event to trigger validity before they settle. For Election Night, Polymarket is presenting such contracts focused on a potential Democratic sweep.
One interesting contract allows traders to bet on whether a Democratic candidate would win the 2028 U.S. Presidential Election, contingent on a sweep happening this year; the odds for this stand at 73% as of Tuesday morning.
In the economic and geopolitical sphere, traders foresee a 35% chance of a U.S. recession by the end of 2027. Conversely, the likelihood of a lasting U.S.-Iran ceasefire through 2027 is minimal, at just 3%.
Senate races are expected to be particularly competitive in Michigan, Ohio, Kansas, and Iowa, suggesting that Senate control contracts may remain unsettled following the elections.
Overall, the activity on U.S. prediction markets has surged dramatically compared to the midterms two years ago, with notional volume across all platforms hitting $1.48 billion by Tuesday morning.
