Prediction Markets Face Accuracy Test in US Midterms After Brazil Runoff Miss

Prediction markets Kalshi and Polymarket face their first US midterm elections since entering the mainstream, with Americans voting today and the platforms' accuracy under scrutiny after a high-profile miss in Brazil. In Brazil's 25 October presidential runoff, Polymarket priced a win for Flávio Bolsonaro at about 80% on election day and 84% the night before, while final polls showed him barely ahead, 51% to 49%. Luiz Inácio Lula da Silva won, 51.8% to 48.2%. Proponents say the markets pool many traders' judgments, each backed by money, and beat polls and newsrooms. The markets made a better call than polls and pundits on the 2024 elections, particularly in swing states. A Kalshi spokesperson called its data bottom-up rather than elite-driven. The platforms say they do not take sides in a bet, take a cut either way, and have attracted billions of dollars in venture capital. Kalshi is a federally regulated exchange.

Left-leaning outlets, both from The Guardian, lead with doubt. The Guardian US analysis opens on the Brazil miss, setting the poll and market figures against the result and noting that some wonder whether earlier successes were luck. Judith Levine's Guardian opinion column argues the populist pitch is false: a few skilled traders control the markets, most users lose, fraud and insider trading are possible, and voters are misled. Both pieces credit the markets' 2024 record but question what it proves. Right-leaning outlets had not reported this story at the time of writing, while left-leaning and alternative outlets had. Alternative coverage differs from the left's. Axios takes a business angle, saying Kalshi and Polymarket should be pulling for Democrats even though they officially do not care who wins. CBS Sports runs a promotional how-to guide to Kalshi cricket trading, with a $55 bonus offer and no election content.