During the summer, Shayne Coplan, CEO of Polymarket, shared insights on a Netflix documentary highlighting how the 2024 US Presidential Election became pivotal for the prediction markets industry. Following a significant court ruling, prediction markets provided Americans with a legal avenue to trade on political contracts as Donald Trump registered a noteworthy victory over Kamala Harris. While NBC News and other outlets indicated a close race in their final polls, Polymarket assigned Trump a 58% likelihood of winning as polling stations closed on Election Night. A commentator on Fox Business noted, “Polymarket was spot on the entire time.”
“That was one of the most gratifying moments ever,” Coplan remarked on the show, *Instadoc: The Prediction Games*. “From that moment on, there was a level of credibility that prediction markets changed entirely.”
Fast forward two years, and event contracts for the 2026 US midterm elections have surged in interest, raising questions about whether collective insight from the public could eventually outpace traditional polling methods. By October 15, over $750 million in notional volume had been transacted on new platforms, according to CNN, marking an almost eight-fold increase from the trading volume during Congressional and state races in 2024.
Although Americans engaged enthusiastically in presidential contract trading, they recorded only $92.4 million on other election contracts. Currently, there are more than 21,000 midterm offerings on Kalshi and Polymarket, as reported by the Anti-Corruption Data Collective. With the midterms approaching, the total trading volume could reach $1.6 billion, according to the nonprofit research organization.
“These midterms are going to generate a lot of interest because there’s a lot at stake in them. In that way, this is one of the biggest tests for prediction markets,” commented author James Surowiecki during the Netflix show.
In distinct news, the NBA recently implemented a policy aimed at enhancing the integrity of betting markets by prohibiting specific prop bets. Announced ahead of next week’s regular season opener, wherein the New York Knicks will unveil a championship banner for the first time in over 50 years, this initiative comes as the league grapples with recent scandals involving prop manipulation, with several former players set to face trial soon.
Under the new guidelines, customers will be restricted from betting on props for certain reserve players. Generally, prop bets will not be available for players expected to play less than 12 minutes in a game. Additionally, customers may not place multiple “unders” regarding a single player’s statistical performance. For example, sportsbooks will no longer allow combined “under” bets on LeBron James’ points, rebounds, and assists for one game; however, such bets are still available on Polymarket. Currently, a $10, three-leg combo bet for LeBron’s debut with the Philadelphia 76ers has a payout of $14.19. As of Friday night, Kalshi had not listed under combo markets for NBA games.
The NBA has engaged in discussions with the US Commodity Futures Trading Commission (CFTC) to establish an integrity framework for basketball-related event contracts, though a formal Memorandum of Understanding has yet to be signed. NBA executive vice president Scott Kaufman-Ross acknowledged the challenges posed by prop restrictions without an official deal in place.
In another development, the CFTC had no significant announcements last Friday, continuing the discussion over whether sports event contracts differ significantly from legal sports wagers. The agency maintains its belief that it has exclusive jurisdiction over the regulation of derivatives, a stance opposed by many state attorneys general, potentially leading to a Supreme Court showdown.
On October 9, the CFTC issue a Notice of Proposed Rulemaking, suggesting a broader interpretation of financial swaps. If implemented, this rule would categorize event contracts on sports and politics as swaps. Previous appellate court decisions have dismissed the idea that sports derivatives could override state laws regarding sports betting.
CFTC Chair Michael Selig, in his first interview since the rule proposal, emphasized the agency's commitment to addressing problematic market behaviors, such as insider trading and fraud. Bloomberg reported earlier this week on a federal probe into $2.6 billion in suspicious oil trades coinciding with the start of the US-Iran conflict. Additionally, the Wall Street Journal noted that the CFTC reviewed approximately $5 billion in trading on Kalshi related to bitcoin perpetual futures, which Kalshi firmly denied accusations of wash trading. Selig elaborated on the proposed event contract rules during a Fox Business interview on October 15, stating, “We regulate these in our derivatives markets every day, whether it’s oil or any type of commodity. My concern is that you can’t offer an order book in a casino; that’s not how these wagers work when placed with a bookie.”
