When election markets pay out (it's complicated)
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Illustration: Sarah Grillo/Axios
The popularity of prediction markets (for gambling on politics) is a new phenomenon in the United States, and who pays out when is not at all consistent.
Why it matters: Prediction markets are suddenly at the center of political chatter, but how bettors actually collect is somewhat untested and has implications for the growth of these markets.
State of play: Some of the new markets are being cautious about finalizing the presidential election winner.
Case in point: Kalshi, a market only open to Americans, is not closing its presidential market until Inauguration Day, January 20.
- "From the beginning, we knew we would resolve at inauguration because it is the most clear resolution criteria available," Jack Such, Kalshi's spokesperson, tells Axios.
- The company is also up against an appeal by the CFTC over whether it will be allowed to offer election-based markets again in future cycles.
Zoom out: Others are calling it once the process officially finishes — but even there, the definition of "finished" is flexible.
- Interactive Brokers will close the market just before the Electoral College meets, but will wait until Jan. 7 to pay out.
- Robinhood is also resolving its contract after Congress certifies the results, with payouts planned for Jan. 8.
- PredictIt, which has been running markets on real events since 2014, also bases its resolution on when the Electoral College results are certified, according to the market's rules, but it leaves itself some flexibility to move that around.
Yes, but: Market leader Polymarket, nominally closed to Americans, only waited for three major news organizations (AP, Fox and NBC) to call it.
- It also has a market for who will actually be inaugurated for folks who want to be absolutely sure (not many takers, however).
The bottom line: It looks like these new markets called the big race more clearly and with more confidence than the pollsters, but it remains to be seen if bettors will end up preferring one the next time around.
