Prediction markets are again keying on two big things – sports betting and yes, politics. With the Governor primary scheduled for June 2nd, the time is getting close at hand. Ballots will ultimately decide the two candidates that will battle it out for the top spot. Polls have been an interesting sort and the realty the race so far has been more defined by powder keg moments than anything else.
Honestly, it seems that California bettors do not mind the prediction markets. It creates one start reality that online betting sites may not have a leg to stand on even in 2028. Now, the problems have mounted for legislators, tribes, and proponents of sports betting in “the Golden State”. The reflex for California is to try and clamp down on the prediction markets too.
One thing that has been good with the prediction markets is that they have provided a useful measure err political insight. Remember that predictions are based on real life events. Are the voters ahead of the polls or is it a mix of Column A and Column B. That depends on who you ask.
It is not like the race only has a few viable candidates. Again, California is like trying to make sense of the senseless sometimes. The difference with prediction markets is one can ditch a wager and sell it off to someone else. With betting, the bet is all yours from beginning to end. Think of that as for better or for worse.
Prediction markets have enjoyed a grey area and a somewhat vital interest when it comes to an election cycle. Does anyone trust polls as much after the 2024 election cycle? It was a total wreck when 62.5% of prediction markets were buying on Donald Trump. California polls may be the most notorious of all. Even the state could not come close to what was going on nationally. Naturally, the Las Vegas odds would be all over the place too.
The first key with the prediction markets is this. Steve Hilton is believed to be a relatively clear favorite if you trust polling. Kalshi bettors believed that Eric Swalwell had a 73% chance of winning. Right now, with Swalwell out, the gamblers on both Polymarket and Kalshi are a bit torn. Tom Steyer was leading at one point but now Xavier Becerra is a slight frontrunner.
As for other action, there are bets on who Gavin Newsom will ultimately endorse. Even the question of when Katie Porter will drop out has come up. Predictions of which candidates both parties will be from has grown a little murky as expected. One of the big differences is the scale of volume. $3.7 billion was wagered on the 2024 election cycle. The California race has generated about $12.4-13 million so far though it is early.
When it comes to the prediction markets in California, things do get interesting quickly. Just because some national elections are accurate predictors does not a prediction market make. One of the strangest quirks is of course the shortcomings.
If anyone needs a reason why prediction markets and the inevitable shortcomings are real, it is this. Well, California has a race here where the older residents clearly will not touch a prediction market. It is almost like a “March Madness” scenario for the 20-30 crowd and this takes on a NCAA Basketball betting like appeal. Think of smaller polling samples, what do they lack? They lack the bigger N err sample.
Had legal sports betting been an option, maybe this would be different. Also, prediction markets do dabble in crypto and bitcoin a lot more compared to conventional legal betting markets. Insider trading is another big issues and several high-profile events did not help matters. California is trying to rein things in but it is currently having a difficult time doing so.
Unfortunately, contrary to what most legal sites believe, younger male bettors in California actually tend to swing more to the left than to the right. Look at recent events like the attempted shootings in Washington D.C. Another shortcoming with prediction markets is the lowest common denominator. It also feels like you can trade bets on almost anything.
Yes, California still has not taken the fight to prediction markets. More and more states are trying to regulate Kalshi and Polymarket. The tribes appear pretty united against the idea of prediction markets moreso than the legislative and executive branches. Prediction markets have been aligned more or less with the CFTC and some tribal legal proceedings have been muted. This is because prediction markets believe they have CEA protection.
The problem remains ironically the politics in the state. Tribes have asked for a stay in the litigation while the Ninth Circuit waits to make a ruling. Judges have previously sided more with Kalshi and other prediction markets in California. It is all in the argument, I guess.
Ironically, keep on states like New Jersey who have appealed rulings that seem to allow prediction markets in that state. The IGA seems to be monitoring all these cases and more. This feels like states are just prolonging the battle in various ways until there is more clarity.
With significant sporting events and more looming in 2026, including the World Cup, there are other battles that the tribes seem to be even more focused on than the aforementioned prediction markets. As for the politics, maybe state politics just do not carry the interest compared to the national scene. The numbers do not lie.
