Published on: November 11, 2024, 10:14h.
Last updated on: November 11, 2024, 10:26h.
DraftKings aims to venture into non-sports betting prediction markets, particularly election betting, post the 2024 White House race which garnered massive media coverage and frequent references to odds by political experts leading up to November 5.
Shortly after Donald Trump’s re-election for a second term and a surge in interest for political betting exchanges, DraftKings CEO Jason Robins announced during the company’s Q3 earnings call that they are considering entering such betting markets. Robins, a co-founder of DraftKings, expressed enthusiasm for election and non-sports betting opportunities, deeming them “very interesting.”
Robins stated, “I do think there could be a place for [prediction markets] outside of elections, but that’s really where the interest seems to be now from customer demand side. It’s definitely something we’re looking at in advance of the next presidential election and potentially there will be an opportunity to look at something sooner.”
However, Robins highlighted that such betting involves different regulations compared to sports betting.
“It’s not licensed as a betting product. It’s licensed as a financial market,” Robins continued. “It’s a very different thing. So, we’ll have to see where it fits in, but we’ll plan on looking at it ahead of the next election, that’s for sure.”
Record Betting
Over $3.65 billion was wagered on the 2024 presidential election outcome on betting exchanges Polymarket and Kalshi.
The majority of the betting activity took place on Polymarket, an offshore, crypto-driven peer-to-peer betting exchange that prohibits bets from individuals within the United States due to a settlement reached with the US Commodity Futures Trading Commission (CFTC) in 2022. Polymarket’s 2024 US presidential prediction market attracted significant interest from bettors outside the US, with over $3.2 billion in bets placed.
The wagers heavily favored Donald Trump, the newly elected president. Trump’s implied odds on Polymarket were 61% as the first polls closed, while Vice President Kamala Harris stood at 39%.
There was more support for Harris on Kalshi, where her odds were 42% compared to Trump’s 58% as the initial polls closed. However, Kalshi had much less betting volume on the election outcome, totaling around $450 million.
Kalshi entered the race late due to legal challenges. The Trump-Harris market on Kalshi only went live in early October after a federal appellate court ruled against the CFTC’s order to refrain from offering prediction betting markets on US elections.
Bettors Beat Pollsters
Ahead of the 2024 presidential election, pollsters predicted a close contest. Many key swing states were within the margin of error, indicating that Harris had an equal chance of winning as Trump.
However, the betting markets suggested that Trump had a significantly higher chance of securing 270 Electoral College votes. And they were right.
Kalshi Lead Market Editor Terry Oldreal noted, “Traders were bullish on Trump in the Sun Belt regions and didn’t buy into the Harris hype. From the beginning, our markets in Georgia, North Carolina, and Arizona all favored Trump despite speculation of an upset. Our markets proved accurate, and skeptics now acknowledge our success.”