Whale Bettor Shifting US Presidential Election Markets

An interesting story happening in the US presidential election cycle, Polymarket, a prediction market website, gives Donald Trump a 64% chance of winning the election. A number that's wildly different from traditional polling where the race is much closer.

Per FiveThirtyEight, average polling data has Democratic Nominee Kamala Harris ahead with a slim 1.8-point lead over Trump at 48.1% to the Republican's 46.3%. So why are Polymarket's numbers so different than polling data?

Polymarket is built on basic micro-economic principles, namely supply and demand. The price of a good, in this case, "Trump will win the 2024 election" goes up as demand rises which is the number of bets placed on Trump to win.

You can probably guess where this is going. "Wouldn't that leave the platform vulnerable to large bets swaying the market?" That's exactly what seems to be happening. See you do remember your early Econ lectures!

A single individual, or a "whale" bettor because of the staggering amount wagered, has placed $30+ million worth of bets on Donald Trump to win and it's affecting the market in the Republican's favor.

A @Polymarket whale on has bet over $32m (and counting) on @realDonaldTrump.

See all their bets here: https://t.co/SMHCDdqX0Y

Shoutout @Domahhhh & @fozzydiablo for tracking down the whale. pic.twitter.com/wGzqPdpO9e

— Primo Data (@primo_data) October 18, 2024

Prior to these bets, the Polymarket prices mimicked polling data at roughly 50% either way. Some believe this is a clear sign of a conspiracy that may or may not be there, but it is interesting to note that in Canada where sports bettors have access to US election betting markets, the odds seem to mimic Polymarket's implied odds. Sports Interaction is giving Trump -189 odds to win the White House in November, which is a 65% implied chance of winning.

We'll only see if prediction markets are better at forecasting elections over traditional polling data once the ballots are counted in November, or if these sites' vulnerability to classic market manipulation schemes will sink them.