With this year’s rising popularity of presidential election prediction markets, not only can pollsters predict the outcome of the election, but ordinary investors can too. Robinhood, the latest platform to make its foray into election betting, has raked in over 100 million bets after introducing contracts last week, according to the company’s CEO.
“100 million contracts have been traded in less than a week on @robinhoodapp’s Presidential Election Market,” Robinhood CEO and co-founder Vlad Tenev posted on X on Sunday.
On the Robinhood app, users can watch in real-time as bets are placed and the likelihood of either candidate’s victory adjusts accordingly. At the moment, former President Donald Trump leads with 55% while Vice President Kamala Harris is polling at 46%.
Robinhood’s betting site appears like this:
Robinhood, which lets users trade a wide variety of stocks and crypto assets, introduced U.S. election betting on its mobile app last week. The presidential election contracts are the first event contracts to be offered on its prediction market. In order to place bets, users have to meet certain criteria including being a U.S. citizen and having been approved for a Robinhood Derivatives account.
Robinhood’s rollout came after a court in September sided with prediction market Kalshi, which had sued the CFTC to challenge a long standing prohibition on election betting. The ruling opened the door to these contracts in the U.S., leading Kalshi to launch bets on the Presidential race soon after. The new offering attracted $30 million in bets in its first three weeks.
The CTFC is appealing the decision which could halt betting, but not until after the 2024 election.
Kalshi and Robinhood are not the only prediction markets that offer election betting. Polymarket, a platform that offers contracts in cryptocurrency, and PredictIt have popular contracts too.
While Polymarket cannot operate in the United States, its U.S. election prediction market has amassed almost $3 billion worth of volume and had Trump polling around 58% on Monday. However, recent evidence suggests a large portion of trading on the platform is fake.
Prediction markets work like this: If Trump has a 55% chance of winning on Robinhood, contracts in favor of Trump will go for $0.55 and users can purchase multiple contracts to increase their winnings – or losses. If Trump wins then you receive $1 for each contract and if he loses you receive $0 for each contract.
It is important to note the timeline when purchasing election contracts on Robinhood. While the election is scheduled for November 5th, the outcome of the contracts will not be determined until January 7th and users will not receive a payout until January 8th.