How Political Prediction Markets Prediction Markets Work: A Practical Guide

Picture an election contract on your phone priced at 60 cents for Yes.

If the contract pays $1 if the event occurs, then a $0.60 price implies traders believe there’s about a 60% chance. That doesn’t mean 60% of the voters will go that way and the traders could well be wrong.

To understand what you’re looking at on the screen, you need to look at three things: what the contract actually pays, the price (which is very important), and the rules, the costs, and the eligibility before you go and pick a platform.

Key Takeaways

• A price is a market estimate, not a fact. The CFTC explains that a contract’s price is simply what the market thinks the odds are.
• Payout is not profit. To get your actual result, you need to subtract what you paid and any fees.
• Written rules decide settlement. It’s the contract terms and the sources cited in those terms which dictate the outcome, not the news headlines or TV projections.
• Platforms differ on access and display. Age restrictions, where you can use them, the costs involved and how the pricing is displayed can all be very different from platform to platform.

How a Political Event Contract Works

An event contract is based on a particular question about something which may or may not happen in the real world. It’s not like a share in a company in that it gives you no ownership.

As per the CFTC’s guide to prediction markets, event contracts are typically based on yes/no questions with a fixed payout (usually $1), and a fixed expiry.

After you’ve bought you hold the contract until it settles. On most regulated platforms you can sell prior to the outcome being known, provided that another trader is willing to take it at that time and at that price.

You can’t always rely on selling early at a particular price.

A Worked Example

Imagine a contract asking whether a named party will control a particular chamber of Congress following the 2026 mid-term elections.

These are just illustrative prices, not actual quotes. If you bought 10 Yes contracts at 60 cents each that would be $6.00.

With a fee of 2 cents per contract at this price your trading fee comes to 20 cents. Your total cost is therefore $6.20.

If Yes settles at $1 your 10 contracts pay $10.00. After deducting your $6.20 cost that leaves you with a profit of $3.80. If Yes settles at $0 you lose the full $6.20.

If you’re selling prior to settlement, it’s a different proposition. You pay another trading fee and your outcome is based on the price you get, not the $1 settlement value.

How to Read the Price Without Mistaking It for a Poll

For a standard $1 contract the price is just a rough approximation of the market’s probability. It tells you what the market thinks, but there is no guarantee that they are right.

Win Probability Versus Vote Share

A candidate with 52% in the polls and a contract at 52 cents are two very different things.

A poll shows the level of support a candidate has with the voters, the contract price shows the probability of the candidate winning according to the rules of the contract. A candidate can be polling ahead and still end up losing the race.

Prices Move on Trading, Not on Announcements

News can quickly alter what traders are expecting and cause the price to move. A price move does not mean the event has occurred or that anything is settled as settlement is governed by the terms of the contract and the source of the information.

A network’s election night projection may well be different from the outcome that ultimately settles the contract.

The Quoted Price and the Price You Get

The price you see on screen may be the price of a recent trade or the current market quote so it may well be different to the price you actually get for your order.

If there aren’t many orders then the spread between the buy and sell price will be wide and a large order can move the price in a direction that’s not to your advantage.

Always check the order preview to see the final price and fee prior to confirming.

Leave Room for Uncertainty

Even if the contract is priced at 80 cents there’s still a roughly one in five chance of the other outcome.

The CFTC note that traders’ collective knowledge can on some occasions be a better predictor of the outcome than polls, but ‘sometimes’ is the key word.

Just look at the market prices in conjunction with the polls and all the other data before drawing any conclusions.

Choosing a Platform for Political Contracts

Once you can read a contract, the next step is matching a platform to the races you care about.

If you already follow sports through the Fanatics ecosystem, Fanatics Markets places its political prediction markets in the same app as its sports, economy, crypto, culture and companies contracts.

A look at its politics hub on 15th October 2026 showed contracts on the House and Senate following the 2026 midterms, the individual Senate and Governor races and the 2028 presidential race.

The list also included nominee contracts for both major parties, a California ballot measure and elections overseas (e.g. the Brazilian presidential election).

Listings are constantly in flux and simply see

How Prices Appear

Rather than show cents per contract, the board shows each side as a % and what a $100 position would pay if that side won.

The two sides could well add up to more than 100% as the quote includes the spread. Think of it as a quoted price rather than an exact probability.

Fees You Can Check in Advance

Its fee disclosure (effective 2nd September 2026) is a total trading fee of $0.00034 to $0.02 per contract bought or sold.

The fee is 2 cents on contracts in the 20 to 80 cent range and it reduces for contracts outside of that range.

Order totals are rounded up to the next cent so the minimum charge if you’re buying just one contract is one cent.

ACH deposits are free, although using a debit card, Apple Pay, PayPal or Venmo will incur a fee of up to 2%. The order window will show you the estimated fee prior to you submitting the order so you can see what it’s going to cost you.

Eligibility and Oversight

You have to be at least 21 to open an account and access is only available in certain states and US territories.

The platform is a CFTC-registered futures commission merchant and an NFA member, with contracts offered via Crypto.com | Derivatives North America.

Who It May Suit

This would be ideal for the type of user who wants both sports and political contracts in one account (i.e. they want to see the fee per contract prior to confirming) and who also meet the age and location criteria.

If you’re after the widest possible range of local or niche races then it’s worth comparing the listings across a number of platforms first.

How It Compares With Other Regulated Options

Other CFTC-regulated platforms will also have political contracts; just that the same title can mean quite different things on each platform.

Compare the precise question, settlement date and resolution rules for each contract side by side.

Kalshi have a 2026 Midterms hub which brings the Senate, House and Governor markets together in one place.

Polymarket runs two separate products. The international site blocks US users, and the US users have their own app (which is CFTC-regulated) with its own listings and its own access rules.

DraftKings Predictions, the sportsbook brand’s standalone event contract app, lists political contracts on congressional, gubernatorial and presidential outcomes.

FanDuel Predicts will be its own app (built on the CME Group listed contracts) with a smaller political offering than on the dedicated exchanges.

Access rules vary from platform to platform (age restrictions, states allowed etc). Check both of them prior to opening an account.

What to Check Before You Place an Order

The Question and Settlement Rules

Read the full contract terms not just the headline. You need to know the precise outcome, the key date, the source that will confirm the outcome and how the rules deal with a tie, a recount, a withdrawal or a delay.

The CFTC says customers are entitled to clear information on the terms of the contract, including how the settlement determinations are made and who makes them.

If the rules name a particular certifying body then the news media cannot act in that body’s place.

Total Cost

Just add up the purchase price, the trading fees and the deposit fee (if any) before you go ahead and commit.

The CFTC also advises that you only trade with money you can afford to lose after you’ve taken into account your living expenses and your savings requirements.

Account and Device Security

Treat any trading app that’s linked to your bank account in the same way as you would a banking app.

Review its permissions, turn on multi-factor authentication and keep your phone updated, and built-in Android privacy tools make that review quicker.

The CFTC also recommends using the links from the official platform website to get to the trading apps, as fake apps do from time to time appear in the app stores.

The Bottom Line

Election event contracts turn a political question into a contract which has a fixed payout and a market price.

To read these contracts properly, separate out the payout from the profit. Treat the price as an estimate and let the rules in the contract determine the outcome.

Before you go and pick a platform, make sure you compare the actual contracts that are available, the fees as shown in the order preview, and that you’re eligible (age- and location-wise).

Doing the groundwork is more important than any one price you see on the screen.

FAQ

Is a contract price the same as a poll result?

No. A poll is a measure of voter support; a contract price is a market-based estimate of whether the outcome of the contract will occur.

Can I lose more than I paid?

On a standard yes/no contract where you’re buying outright the most you can lose is your purchase cost plus fees.

What decides how a political contract settles?

The contract’s written rules and the source they reference. A media projection only counts if the rules state that it does.

Can I sell before the election?

Often, yes, while trading is open and another trader will take the other side. A sale carries its own trading fee, and the price you get may differ from the last displayed figure.