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Billionaire Elon Musk insists that election betting is “more accurate than polls, as actual money is on the line” — but is that true?
Election betting is becoming a hot topic in the United States as the months-long presidential election frenzy intensifies.
As of Thursday (October 24), the betting site touted by Musk, Polymarket, had taken in more than $2.4bn in election bets with Republican Donald Trump a nearly 62 percent favourite over vice president Kamala Harris.
But with the betting bonanza comes concerns that odds are being manipulated by a small number of wealthy bettors seeking to create bogus momentum for the Trump campaign.
And the New York City-based company seems to have no gambling licence from any country, although it offers traditional sporting bets alongside exotic bets on celebrities and cryptocurrency prices.
On Thursday, Polymarket said it had confirmed speculation that a small number of accounts had made a big bet on Trump, pushing odds in his favour.
A French national with “extensive trading experience and a financial services background” had made bets totalling a trading position of about $28m as of Thursday morning, according to the New York Times.
Polymarket said it found no evidence of attempts at manipulating the market, but a trader “taking a directional position based on personal views of the election”, the Times said.
Polymarket’s estimates on the US election are not far out from others.
On Thursday, Betfair had Trump by a 59 percent margin, with £102.6m matched bets ($133m). Polymarket is a peer-to-peer betting site, like Betfair.
But are election betting services more accurate than polling?
One long-time UK-based political gambler said there is evidence in both directions.
Polls have underestimated support for Trump in the last two elections, said Paul Krishnamurty, who works for the offshore BetOnline.ag, as well as doing freelance work for Betfair.
But political bettors wrongly predicted British voters would opt to Remain in the European Union in 2016, and missed the shock defeat by Australia’s Labor Party in 2019, he said.
In 2020, madness erupted on betting sites, perhaps mirroring the post-election chaos that culminated in the January 6 attack on the Capitol building by Trump supporters.
Betfair kept its market open after the November 3 election, and bettors posted matched bets in the millions, even though Joe Biden had already been declared the winner by a comfortable electoral college margin.
Two-thirds of the money traded came after the election, with betting syndicates seeing an opportunity to nab a risk-free 10 percent on their money, Krishnamurty said.
They were taking money from die-hard Trump supporters who were listening to the “echo chamber” that said he would succeed in his efforts to overturn election results, the betting expert said.
Several factors could be distorting the current betting swell for Trump, Krishnamurty said.
For example, this election is the most split by gender in US history.
Trump and Elon Musk devotees are both heavily male and men are by far the biggest online gamblers, and the biggest users of cryptocurrency, the political gambler said.
Polymarket offers bets via stablecoins, cryptocurrency meant to be worth about $1.
But the swing toward Trump in betting could also reflect a genuine feeling that the race is tightening, with Harris’ lead wilting in stakes such as Michigan and Wisconsin, Krishnamurty said.
Polymarket was founded only in 2020, and is based in New York City.
In May 2024, it got $45m backing from Peter Thiel’s Founders Fund, plus Vitalik Buterin, founder of Ethereum cryptocurrency.
Trump’s running mate JD Vance used to work for Thiel, who is credited with helping convince Trump to add the Ohio senator to the ticket.
Musk himself has appeared on stage with Trump, and has been offering $1m each day to voters in the key voting state of Pennsylvania.
Besides a range of Trump-Harris bets, Polymarket is also offering more traditional wagers, on sporting events including Sunday’s Philadelphia Eagles v Cincinnati Bengals NFL game.
Bets can also be made on whether Musk will post more than 300 tweets in a week, or Trump will say “skibidi” before the election (only a 2 percent chance but $205,000 has been wagered).
But the popular trading platform does not appear to have a gambling licence of any kind, which would put it in violation of laws in any country which makes offering unlicensed gambling to residents a crime, if it is accessible in those locations.
Polymarket blocks deposits in the UK, and it has been barred from taking bets from Americans since January 2022, when it paid $1.4m in a settlement with the Commodity Futures Trading Commission.
In Sweden, betting on elections is legal, but cryptocurrency gambling is illegal, as is offering gambling to Swedes without a licence, said a Swedish Gambling Authority spokesperson.
Offering bets on elections is illegal in the Netherlands, as is offering gambling with cryptocurrencies, a spokesperson for the Netherlands Gambling Authority (KSA) said.
Spokesperson Marloes Derks attempted to register on Polymarket, at a Vixio GamblingCompliance request.
“It seems I can register and I got quite far through the payment process but the payment provider has blocked my region, so I couldn’t deposit,” she said.
She called the situation a “grey area”, as Dutch residents being able to deposit funds is a key component of deeming a gambling website an illegal offering.
But if a website “attracts a great deal of Dutch players/visitors, we would of course explore our legal options to stop them from offering on our market”, Derks said.
Polymarket had not responded to a request for comment by the time of publication.
