• Bill Ackman argues that more liquid prediction markets produce more reliable forecasting signals, sharpening a debate over whether market odds can be trusted as election forecasts.
  • The claim faces an immediate stress test: more than $1.48 billion has changed hands on U.S. midterm outcomes across major platforms, with election results still pending.
  • Regulators, researchers and election officials remain divided over whether prices reflect informed expectations or can be moved by concentrated trading.

The Liquidity Argument, Put to the Test

Ackman's headline makes a straightforward economic case: when traders can move meaningful size without sharply shifting prices, the odds embedded in prediction-market contracts become more useful as forecasts. Deeper order books, in theory, make it harder for a single participant to distort a price and give informed traders more room to correct mispricing.

The timing is pointed. November 3 reporting puts Kalshi's midterm trading volume at roughly $1.33 billion, with Polymarket's congressional markets accounting for about $145 million. Those are turnover figures, not revenue or unique capital deployed, and the outcomes themselves were unresolved at the time of writing. For an audience accustomed to watching spreads and depth rather than headline volume, the distinction matters: cumulative trading is not the same as standing liquidity on both sides of a market.

Calibration Versus Confidence

Accuracy remains the contested ground. Research summarized in recent reporting found prediction markets generally well calibrated across nearly 2,500 markets tied to the 2024 election. Vanderbilt political scientist Joshua Clinton, however, cautioned that aggregate calibration says little about the reliability of any single price—a nuance that cuts against treating market odds as a turnkey forecast.

A counterexample from late October underscores the point. Prediction markets heavily favored Spencer Pratt in the Los Angeles mayoral primary before he finished third, a contest that drew more than $47 million in trades. Kalshi subsequently documented price spikes, though the episode does not by itself establish manipulation. Taken together, the record supports using prediction markets as a supplementary signal rather than a substitute for polling or scenario analysis.

Sports Drives Growth, Politics Drives Scrutiny

Commercial adoption is broadening even as the legal picture darkens. On October 26, the NBA named Kalshi and Polymarket its preferred prediction-market exchanges, attaching restrictions on permissible contracts, information-sharing on suspicious trading and bans on league and team personnel trading on NBA events. Congressional Research Service figures show sports accounted for roughly 87% of Kalshi's $39.7 billion in turnover over the year through February 2026, and 38% of Polymarket's $36.2 billion—historical turnover, not audited financial performance.

On October 30, a Bloomberg Government overview described conflicting court decisions and a state push for Supreme Court intervention over whether federal derivatives law displaces state gambling regulation. The CFTC is pursuing its own rulemaking, with an October proposal that would expressly bring sports-, politics-, cultural- and weather-related event contracts within the definition of a "swap." That proposal is not a final resolution of the federal-versus-state question.

For investors, the practical relevance is the midterms themselves. Market-implied probabilities on congressional control are one input into assessing fiscal policy, technology regulation and artificial-intelligence spending—useful, but not a substitute for scenario work. Whether greater depth genuinely improves forecasting will be settled race by race against certified results, not by a single favored candidate losing.

A representative for Ackman did not respond to a request for comment on the timing and venue of the remarks.

Clarification: An earlier version of this article referred to trading volume without specifying that it reflects cumulative turnover rather than company revenue or unique dollars invested.