From federal elections down to local contests, the scope of electoral betting is about to expand dramatically, and the obvious problem has become clear: political insiders know things ordinary bettors do not. As prediction market giants like Kalshi and Polymarket prepare to cover thousands of races across the country in the 2026 midterms, it’s become clear that election betting is no longer just a novelty for political junkies.
In April, Kalshi suspended three congressional candidates — two Democrats and one Republican — for political insider trading by placing bets on their own races. Mark Moran, then a Democrat and now an Independent candidate from Virginia, was the most egregious case. Moran bet both on his own candidacy prior to announcing his run for public office, and traded again on his own campaign afterward.
Moran claimed he “wanted to get caught” by Kalshi as a means of drawing attention “to highlight how this company is destroying young men.”
Kalshi said its safeguards caught the candidates because of their obvious personal involvement in the elections they were trading on. That’s good news for Kalshi’s regulatory controls, sure. But it is a real problem that will not remain a rarity as the electoral betting market scales as never before.
As political gambling moves down the ballot into more than 6,500 upcoming local, state, and federal races, it is also approaching uncharted waters: Races where campaigns are smaller, and scrutiny is less sharp, are precisely where insiders who know more than the public might slip between the cracks.
With elections, the people closest to the outcome are not just observers, and a campaign insider does not just have an opinion about a race. People involved at all levels of an election, from candidates to staffers to pollsters, can possess private information about fundraising numbers, endorsements, or the campaign that has not yet reached voters or ordinary market participants.
Prediction markets understand this and have made strides in enforcement tools and market surveillance to prevent insider trading. The question remains, though, as to how well these safeguards keep up when the markets become much more granular.
A market on who wins the Senate or a gubernatorial race is different from a market on turnout in a local race or the margin in a congressional district. In lower-profile markets, insiders could have more avenues to profit from private information that is less straightforward than a candidate betting on his own race.
To further complicate matters, prediction markets do have a real case for usefulness in political forecasting. Recent research on the 2024 election markets suggests that political betting markets can contain some predictive value over typical polling measures, although their accuracy can vary by platform. Unlike a public poll, a market price changes in real time and asks participants to put money behind what they claim to believe.
Markets where insiders are allowed to participate are, without a doubt, unfair to honest bettors. They also lose their usefulness as forecasting tools, as well. When campaign staffers, consultants, or party operatives can quietly trade on privileged information, it is no longer reflecting public information and judgment but proximity to the action.
Public concern over whether election betting should even be allowed persists. In a recent Politico poll conducted May 17 to 19, 44% of 1,167 respondents believed that betting on election outcomes at all should be illegal. Only 3 in 10 respondents believed it should be legal, as a quarter surveyed did not know how they felt.
Prediction markets can likely survive being controversial platforms in the gambling world, and may even prove useful for election forecasting. At the same time, those with insider information, voters, and ordinary participants have not seen any threats to market integrity. The question that remains is whether election betting can expand without becoming a market of private advantage tilted toward insiders.
READ MORE from Henry Zavalick:
Congress’s Iran War Vote Is More Symbol Than Law
