$20mn traded as prediction markets favour Democrats to win House in US midterms

US is heading for midterms election in early November. In a midterm election, the composition of Congress can be altered. House control will be decided by having more than half of the voting members of the House of Representatives, and one-third of the Senate will be on the ballot. The US Prediction markets like Kalshi and Polymarket are projecting Democrats to secure a decisive victory in the November 3 General Elections. The midterm comes as Mr Trump’s approval rating, a typical predictor of how the president’s party will fare, has sunk to a second-term low, driven by US military intervention in Iran and handling of the economy, have fuelled discontent among the voters.

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What are the betting markets projecting?

Two of the major Prediction Markets, Kalshi and Polymarket, are broadly aligned. Democrats are seen as heavy favourites, roughly 3-4 times more likely to win the House then Republican. Polymarket is more bullish on the Democrats than Kalshi, 81 per cent and 76 per cent respectively. Both projects put the Republicans at a disadvantage with 20 per cent and 24 per cent respectively. Across both platforms, over $20.6 milliom in total volume has been traded on the US midterms. Kalshi has roughly two times the trading volume of Polymarket, with over $13.7 million and $6.8 million, respectively. When two liquid markets generally project a particular outcome, it's a strong indicator of insider sentiment.

However, the margin markets are particularly interesting–even among those pricing in a democratic win, the most likely scenario is 22 per cent chance of a relatively narrow margin of 8-10 per cent, not a landslide victory. The Kalshi brackets show a 16 per cent chance of Democrats winning by 10-12 per cent. It gives more granular insight than just win or lose. However, the election is more than five months away, and these odds might shift depending on developments in the domestic economy and geopolitics.