Kamala Harris Overtakes Trump in Polymarket Odds Following Biden’s Exit

U.S. Vice President Kamala Harris now holds a seven-point lead over former President Donald Trump on Polymarket, a crypto-based betting platform. This marks a significant shift in prediction market odds, with Harris flipping the lead on August 9.

Prediction Market Dynamics

Harris’s "Yes" shares are trading at 52 cents, reflecting a 52% probability of her winning the presidency. Trump’s shares, meanwhile, are at 45 cents. Less than a month ago, before President Joe Biden dropped out of the race and endorsed Harris, Trump’s odds were as high as 72%.

Comparison to Polling Data

Harris’s current standing on Polymarket exceeds her lead in traditional polling aggregates. Real Clear Politics shows her with a 0.5 percentage point lead on average. However, some polls still favour Trump, with Harvard giving him a four-point advantage and CNBC showing him ahead by two points.

Influence of Market Behaviour

Some believe that the recent surge in Harris’s odds may be influenced by market behaviour rather than a true shift in political sentiment. CSPTrading.eth, an active political bettor, notes that panic selling and groupthink can distort the market, leading to exaggerated movements.

Arbitrage Opportunities

CSPTrading.eth also points out arbitrage opportunities within Polymarket’s various contracts. For instance, betting on a Republican presidency and Senate with a Democratic House can be cheaper than betting directly on a Trump win, despite similar outcomes.