Lula win exposes Kalshi and Polymarket before midterms

• Midterm prediction market volume tops $1.4 billion, according to a CNN analysis.
• Kalshi says it has seen nearly $1.1 billion, with Polymarket above $340 million.
• Lula wins Brazil’s runoff after both platforms priced him near 20%.

Traders have pushed more than $1.4 billion through prediction markets tied to the 2026 US midterm elections, according to a CNN analysis published on October 23.

The milestone arrives as Brazil’s presidential runoff exposes the limits of market-based forecasting, days before Americans vote on November 3.

Kalshi’s billion-dollar ballot

Kalshi accounts for the bulk of the action. A company spokesperson told CNN the exchange has seen nearly $1.1 billion in midterm volume. That spans race winners, turnout figures, endorsements, debates and what candidates say at rallies.

Polymarket has topped $340 million across its US and international platforms, according to its own spokesperson. Further back, ForecastEx, owned by Interactive Brokers, has passed $6.4 million. UK-based Smarkets has taken roughly $200,000 from British customers.

PredictIt, the veteran of US political trading, declined to share figures. Co-founder John Aristotle Phillips told CNN business has grown on the back of a favorable regulatory climate.

The totals measure contracts changing hands, not cash staked on any single market.

Dustin Gouker, industry analyst and author of a prediction markets newsletter, said:

“It’s sizable. It’s still much less than sports and crypto markets, but it’s a lot of trading.”

Sports remain the industry’s engine. Prediction markets recently posted their first $11 billion weekend, and DraftKings CEO Jason Robins says its DKeX exchange is already the clear No. 3 in the US.

October’s late rush

Election money is arriving late. A DeFi Rate analysis counted $103.87 million in election trading across Kalshi, Polymarket US, ForecastEx and Gemini in the first 20 days of October. The same window in September produced about $41 million.

The Texas Senate race led the charge. It drew $17.94 million on Kalshi in October, three times its total for the whole of September. House control made up roughly 17% of Polymarket US’s October election volume.

A whale’s game

The depth is thinner than the headline suggests. On Polymarket, the top 1% of wallets accounted for 70% of congressional betting volume this cycle, according to Anti-Corruption Data Collective (ACDC) analysis cited by Reuters.

Separate ACDC research, reported by CNBC, found a $3,500 bet could move 97% of midterm markets by five cents or more. That sum is the federal cap on an individual campaign contribution.

Integrity concerns are already live. Kalshi has suspended six 2026 candidates for improperly betting on their own races, CNN reported, and federal regulators have pledged to pursue insider trading around the vote. CNN also noted that, as with gambling, most people who trade on prediction markets lose money.

The 20-cent upset

Brazil delivered the warning shot on October 25. Luiz Inácio Lula da Silva won the runoff with 51.8% of valid votes to Flávio Bolsonaro’s 48.2%.

At noon EDT on election day, Kalshi priced a Lula win at 20.2% and Polymarket at 20.5%. Bolsonaro stood at 81% on Kalshi and 79.8% on Polymarket. An Atlas Intel/Bloomberg poll had shown Bolsonaro narrowly ahead, within its one-point margin of error.

Both platforms have been blocked in Brazil since April. Lula’s win also keeps pressure on a licensed betting market that shed 3,500 jobs in the run-up to the vote.

Kalshi rejected the idea that its market got it wrong. Spokesperson Elisabeth Diana argued that a candidate priced at 20% should win roughly one time in five. CEO Tarek Mansour made the same case on X in August, after a 95% favorite lost Wisconsin’s Democratic primary for governor.

Polls on trial too

The midterms will test that argument at scale. Markets and opinion polls both point to Democratic gains in Congress, so a surprise result would dent confidence in both.

Mansour has framed the midterms as a defining test for market-based political forecasting, according to POLITICO. A Polymarket spokesperson told Reuters its election markets have a 98% accuracy rate one day before an election, a company claim rather than an independent audit.

Pollsters are not ceding ground. Republican pollster Brent Buchanan has questioned whether trading can replace voter surveys, pointing to polling’s statistical methods and direct interviews.

The odds are also reaching a mass audience. CNN became Kalshi’s media partner in December 2025 and uses its data in coverage, though its editorial staff cannot trade on prediction markets. Donald Trump Jr. is a strategic adviser to Kalshi and sits on Polymarket’s advisory board, with his firm 1789 Capital an investor in Polymarket.

Election night looms

Gouker expects volume to spike on Election Day as professional traders chase shifting probabilities. Any gap between prices and results will then play out live, in front of millions of viewers.

Public opinion is already a weak flank. A Reuters/Ipsos poll published this month found most Americans oppose using prediction markets to wager on elections.

Abroad, a Taiwanese court has blocked Kalshi’s website over election bets ahead of local polls on November 28.

At home, a CFTC rule taking licensed sportsbook and casino wagers out of the swap definition took effect on October 19, and states keep pressing their own cases.

A clean read on November 3 strengthens Kalshi and Polymarket’s hand in Congress and the courts.