Trading on 2026 US midterm election contracts had passed $750 million in notional volume by 15 October, according to CNN, a figure close to eight times the $92.4 million recorded on congressional and state races in 2024. The growth has arrived alongside escalating legal clashes: Minnesota has enacted a near-total ban, Arizona has filed criminal charges against Kalshi, and the platforms say federal law should apply.
Trading volume and market breadth
According to iGaming Business, the more than $750 million total was reported by CNN. In 2024, non-presidential election contracts reached $92.4 million. Kalshi and Polymarket now list more than 21,000 midterm offerings, the Anti-Corruption Data Collective said, and the same research group estimates trading could reach $1.6 billion once the elections are complete. Author James Surowiecki told a Netflix programme that the midterms would be a significant test for prediction markets because so much is at stake.
Minnesota's near-total ban
Minnesota's legislature passed what has been described as the first near-total ban on election prediction markets earlier this year. State Rep. Emma Greenman, a Democratic-Farmer-Labor member who helped lead the effort, said the markets "jeopardize people’s trust in government and government decision-making" and "jeopardize people’s trust in elections." On Friday morning, Kalshi gave the Democratic candidate in Minnesota's US Senate race an 87% chance of winning and recorded more than $1.8 million in trading volume, Southern Maryland Chronicle reported. The report said that is precisely the kind of activity the state wants to stop.
Arizona charges and other state action
Arizona has brought criminal charges against Kalshi, according to the Southern Maryland Chronicle. Some state election officials have warned residents that placing money on elections through prediction markets is illegal, while other states are fighting the platforms in court. A number of states have complete bans on election betting.
Federal authority and CFTC proposals
The Commodity Futures Trading Commission claims jurisdiction over the platforms under the Commodity Exchange Act. Polymarket said in a statement that it believes "prediction markets are regulated by the Commodity Futures Trading Commission under a federal framework, not a patchwork of state rules." Kalshi did not respond to a request for comment, but its lawyers wrote in a March court filing that event contracts are swaps and that election and sports contracts fit within that definition. The CFTC currently has one commissioner, Chair Michael Selig, appointed by President Donald Trump in 2025. In June the agency proposed a framework that would continue to allow election trading, and it has also proposed a rule that would define event contracts, including political ones, as swaps. Selig said Americans use event contracts to hedge risks, speculate and provide public information about future events.
Criticism and unresolved state-federal split
Benjamin Schiffrin of Better Markets said voting should be about choosing the candidate a voter thinks is best for office, not the candidate who can generate the biggest financial return. On 27 July, 16 civic groups including Better Markets, Common Cause and Citizens for Responsibility and Ethics in Washington wrote to the CFTC warning that election event contracts are illegal under many state laws and may encourage interference. The CFTC did not answer questions from States Newsroom. According to iGaming Business, a majority of state attorneys general disagree with the CFTC's assertion of exclusive authority, and several appellate courts have rejected the view that sports derivatives pre-empt state sports wagering laws. The platforms remain widely available ahead of Election Day.
