Americans head to the voting booths today with Democrats favored to take control of both the House and Senate according to mainstream polls and prediction markets. Attention has shifted to prediction markets, where the implied probability of a Democratic sweep stands at roughly 75%, down slightly from 78% earlier this morning.

The attention on prediction markets over the last few years has not translated into stronger midterm trading. Bloomberg's report from earlier today shows political trading on these platforms has struggled, even as sports and crypto betting have jumped. 

Election-related turnover on Kalshi was roughly unchanged in the final week before the midterms compared with the same period before the 2024 presidential election. Polymarket's election volume fell significantly. Meanwhile, overall trading across both betting platforms has increased more than twentyfold since October 2024, which may suggest users are more interested in crypto and sports bets than political outcomes.

The Bloomberg report cited data from last month showing that political betting on Kalshi and Polymarket accounted for just 1% of trading, down from two-thirds during the 2024 presidential election.

"Limited trading interest in the midterms represents a problem for prediction markets," the outlet said.

Koleman Strumpf, a professor of economics at Wake Forest University in Winston-Salem, North Carolina, said both betting platforms "need to prove to their investors that they have another business," adding, "They also need to prove to all these other people, regulators, judges, that the more socially valuable part of prediction markets is important."

A separate report by the Anti-Corruption Data Collective showed that liquidity in almost all midterm election markets on both betting platforms is so low that it would take only a few thousand dollars to move their forecasts meaningfully.

"When you introduce tens of thousands of markets, but not all of them have national prominence or are able to attract betting volume, that opens up a lot of vulnerabilities where a savvy, potentially malicious actor could go in and bet a small amount of money and skew the odds in one way or another," said David Szakonyi, co-founder of the collective and a political science professor at George Washington University.

The current Polymarket probability of a Democratic sweep stands at 75% as of early Tuesday afternoon.