Posted on: November 11, 2024, 10:14h.
Last updated on: November 11, 2024, 10:14h.
DraftKings will explore non-sports betting prediction markets, specifically election betting, after the 2024 race for the White House garnered unprecedented media attention and political pundits regularly referenced the odds in the leadup to Nov. 5.
Less than a week after voters reelected Donald Trump for a second term, and interest in political betting exchanges skyrocketed, DraftKings CEO Jason Robins revealed on his company’s third-quarter earnings call that the sportsbook firm is looking at such wagering markets. The DraftKings cofounder said election and non-sports betting opportunities are “very interesting.”
I do think there could be a place for [prediction markets] outside of elections, but that’s really where the interest seems to be now from customer demand side. It’s definitely something we’re looking at in advance of the next presidential election and potentially there will be an opportunity to look at something sooner,” Robins said.
Robins, however, said such wagering involves a considerably different regulatory environment than sports betting.
“It’s not licensed as a betting product. It’s licensed as a financial market,” Robins continued. “It’s a very different thing. So, we’ll have to see where it fits in, but we’ll plan on looking at it ahead of the next election, that’s for sure.”
Record Betting
More than $3.65 billion was wagered on the 2024 presidential election outcome on betting exchanges Polymarket and Kalshi.
Most of the action was made on Polymarket, the offshore, crypto-fueled peer-to-peer wagering exchange that doesn’t allow wagers from people inside the United States because of a 2022 settlement it agreed to with the U.S. Commodity Futures Trading Commission (CFTC). Polymarket’s 2024 U.S. presidential prediction market garnered record interest from bettors outside the U.S., as the contest attracted over $3.2 billion in bets.
The money was on Donald Trump, the now-president-elect. The former casino owner’s implied odds on Polymarket as the first polls closed were at 61%. Vice President Kamala Harris’ odds were at 39%.
There was slightly more enthusiasm on Kalshi for Harris, whose odds as the first polls closed were at 42% to Trump at 58%. Kalshi, however, had much less action on the election outcome — about $450 million.
Kalshi was late to the race because of a lengthy legal challenge. Kalshi’s Trump-Harris contest only went live in early October after a federal appellate court ruled that the CFTC overstepped its authority in ordering Kalshi not to offer prediction betting markets involving elections in the U.S.
Bettors Beat Pollsters
Before the 2024 presidential election, pollsters thought the outcome would be a tossup. Most of the key swing states were within the margin of error, seemingly suggesting Harris had just as good a chance of becoming the 47th president as Trump.
The betting markets implied Trump had a significantly better chance of gaining 270 Electoral College votes. They were right.
Traders didn’t buy the Harris hype, and were very bullish on Trump in the Sun Belt. From their inception, our Georgia, North Carolina, and Arizona markets all showed Trump to be the clear favorite despite talk of an upset,” wrote Kalshi Lead Market Editor Terry Oldreal. “Despite weeks of accusations and speculations, our markets emerged victorious, and our haters are now our waiters at the banquet of success.”
