Prediction markets play key role in election forecasting, Michigan results show why

Audio By Carbonatix

(The Center Square) – In the wake of Democrats’ Election Day sweep across the country, prediction markets are drawing attention for their performance in forecasting election outcomes.

“Before the polls closed, markets were roughly as good as the polls, but no better,” explained AJ Francia, head of product at Prediction.com, in an exclusive interview with The Center Square. “Where polls missed, markets mostly missed with them.”

The 2026 election season marked the first midterm election in which prediction markets became a major part of the national political conversation, with nearly $2 billion wagered on just two platforms, Polymarket and Kalshi.

Francia detailed several races nationwide in which prediction markets, like traditional polls, incorrectly forecast the outcomes. That included South Carolina and Mississippi’s U.S. Senate races and the Texas governor’s race.

“That’s because prediction market traders use polling data so prediction markets will also be affected by polling errors,” Francia said.

While prediction markets did sometimes miss the mark, Francia explained they often made up for that on election night.

“On election night, prediction markets were dramatically faster than everyone else,” Francia said. “Markets read early returns, county results and turnout in real time, and they priced in winners hours before the AP made its calls.”

This included in the hotly-contested Michigan U.S. Senate race between Democrat Abdul El-Sayed and Republican Mike Rogers.

In that case, prediction markets currently gave El-Sayed a 95% chance of winning the race by 8:40 p.m. That was just 40 minutes after Michigan’s polls closed, and nearly six hours before the Associated Press called the race for El-Sayed.

Going into Election Day, prediction markets gave El-Sayed a 79% chance of winning, to Rogers’ 22%.

Prediction markets were similarly successful in calling Michigan’s other statewide races, with Francia saying it was “exactly what markets expected.”

He added that prediction markets will likely continue to be used alongside traditional polling in future elections.

“Prediction market traders rely heavily on polls, so polls will always remain useful,” Francia said. “But, where prediction markets really shine relative to traditional news outlets and polls is on Election Day. Senate control was priced above 99%, hours before the AP called it.”

Prediction.com aggregates data from multiple prediction-market platforms.