Little in the 2024 US presidential election was predictable, certainly not the withdrawal of incumbent Joe Biden and his replacement on the ballot by vice-president Kamala Harris. Polling and statistical models struggled to gauge the unusually chaotic race.
Into this empirical wilderness rushed prediction markets. All they required to quantify the contest was a website and the wisdom of an eagerly depositing crowd.
On these platforms, bettors buy “shares” to trade against each other on the outcomes of win/lose events, with the prices fluctuating as more predictions are made. Each winning share can be redeemed for $1 and so its market price can be read as a probability — a share priced at 25 cents, for example, implies a 25 per cent chance of the event occurring. The markets’ operators make money through transaction fees.