In short
- Prediction markets such as Polymarket and Kalshi correctly called almost all major US election results on Tuesday.
- However, one notable bet on Election Day gave just a 1.1% chance that New Jersey Democrat Mikie Sherrill would win her gubernatorial race by 12 to 15%.
- The bet is said to have yielded a payout of almost 100x, just hours before the election results were announced. Some Polymarket users made tens of thousands of dollars.
Although last night’s US election results were surprising to many political pundits – given the size and scope of Democrats’ victories across the country – the prediction markets stated that they had known the outcome for months.
Prediction markets like Polymarket and Kalshi rightly called the New York City mayoral race, plus the gubernatorial races in both New Jersey and Virginia, by overwhelming margins. Furthermore, those margins had been locked in for months in all three races, leaving relatively few opportunities to make a lucrative bet on election night.
But one exception stands out. Yesterday, on election morning, Polymarket bettors were confident that New Jersey Democrat Mikie Sherrill would defeat her Republican opponent, Jack Ciatarelli, by a relatively small percentage of votes. A $2.7 million market Based on Sherrill’s expected margin of victory, she had a 12-15% chance of winning, with a minuscule probability of 1.1%.
And just hours later, that’s exactly what happened. Sherrill ultimately defeated her opposition by 13.1% in one of the most impressive showings of the Democrats’ big night.
The bet turned out to be one of the most lucrative election night bets that prediction market users had largely seen coming. A $100 bet on the Sherrill market at the right time yesterday (9:00 a.m. ET, to be precise) would have yielded a return of almost $10,000.
Did anyone notice it at the right time? Almost, but not quite. One Polymarket user bought the correct winning margin of 10 cents, but also chose to go all the way with the bet. Their $12,960 position is now ready to pay out over $123,000.
Another one userwho raised $9,891 worth of the right position at 11 cents ended up making more than $86,000.
While prediction markets have proudly marketed their platforms as superior to traditional forms of data collection, Polymarket said last night proclaimed “The polls are dead” – bettors may have done well to listen to old-fashioned signals in this case. The final poll in the New Jersey gubernatorial race, which was released yesterday morning, Sherrill had a lead of 12.
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