Billions of dollars were wagered legally on the 2024 U.S. presidential election, and DraftKings CEO Jason Robins says he wants his company to get in on the action.
Robbins acknowledged the potential impact of this new wagering stream on a conference call with investors last week.
I think it’s a very interesting thing. The market within that that’s dominant is election markets, of course, and particularly during presidential elections. So, I know there’s a lot of attention on it over the last few weeks. It’s something we’re looking at in advance of the next presidential election and potentially there will be an opportunity to look at something sooner. It is a different framework. It’s not licensed as a betting product, it’s licensed as financial market. We’ll have to see where it fits in the priority list. But it is something we’ll plan on looking at ahead of next election, for sure.
This is a significant sentiment.
2024 was a big year for US political speculators
According to NBC News, online trading platform Polymarket brought in over $3.6 billion in what are effectively bets on the presidential election. That included $1.5 billion wagered on Donald Trump and $1 billion on Vice President Kamala Harris.
While Polymarket isn’t allowed to serve American users, there were at least three platforms able to do so this year. One of those, Kalshi, had over $100 million in contracts riding on the outcome.
What about the midterms in 2026 and the presidential election of 2028? This market is poised for significant upside if it becomes fully mobilized.
Imagine a presidential betting menu offered in several states, leveraged by the varied verticals of sportsbook operators.
DraftKings, and most likely several other companies, figure to apply for this opportunity.
Bringing this option to customers will require state-by-state regulatory approvals, which will take time.
Is DraftKings a natural fit for political prop betting?
The book is, figuratively, locked and loaded for any enhancement of the prop-betting world. DraftKings has long offered Oscars wagers. It also takes numerous bets on the annual Nathan’s Hot Dog Eating Contest in New York. The book is prepared to unveil numerous horse racing props once states give the green light.
The size and scope of prop bets hinges on regulatory approvals. In New Jersey, for example, initial Oscars bets were capped at $1,000.
Other operators will likely join DraftKings in the political arena.
The 2024 presidential race would have given books many props to consider. That may have included how many of the seven battleground states each candidate would win and a longshot payout for any candidate to sweep them, which Trump did.
There could have been props on the margins of state victories, the first state to flip, etc. Senate and House of Representatives elections also could have been placed in this format. Expect wagers like this for any book able to offer them.
If operators are allowed to leverage their lineup – say by offering a free sports bet for a certain number of political dollars wagered – they could gain an even bigger footprint in this sector.
Throughout the industry, political betting would be a welcome addition for sportsbook operators.
Growth areas have been tough to find in a maturing legalized sports-wagering market. Operators gained good news this week when Missouri’s decision to allow sports betting in 2025 became official, but they are still hoping that the major markets of Texas, California and Florida eventually join the fold.
Proliferation of electoral betting markets available
The gamblers are already off and running in the political betting world.
Robinhood, for example, offered wagering as a futures contracts resembling a stock-market format.
Combined wagering sentiment on Donald Trump and Kamala Harris had to equal $1.01 or higher to enable a play. Just before Election Day, Trump was at 58 cents versus 44 cents for Harris. Trump backers will thus gain $1 on that purchase on Jan. 7. Harris bettors will receive nothing.
Prices on these bets fluctuated during the election lead-up.
Polymarket has more of a sportsbook feel, as it is loaded with props. This is a market that extends well beyond election day. Will President Joe Biden finish his term? The odds are 92% yes. A $10 bet on Biden returns just $10.87 in what’s considered prohibitive chalk. Wagering against Biden to finish his term returns $111 on a $10 bet.
Polymarket also offers wagers on the Senate majority leader, along with whom Donald Trump will pardon in his first 100 days, and whether he will end the war in Ukraine during his first 100 days.
Similar to the sports-wagering prop market, bettors can take fliers on longshots. Elon Musk is considered a 20% chance to join Donald Trump’s cabinet. Trump has said that Musk will be part of his administration, but not the cabinet. Bettors must thus follow news as they would in the sports betting world.
Regulatory battle is far from over for political markets
The battle for industry control in this area may be as fierce as the political races themselves. Kalshi, PredictIt and Aristotle International faced legal pushback from the Commodity Futures Trading Commission (CFTC) before the election. Because they are futures exchanges, the companies are within the CFTC’s jurisdiction.
Citing an impact on election integrity, the CFTC temporarily halted the companies from offering this product.
But in October, a U.S. federal appeals court allowed the companies to go forward, ruling that the CFTC could not show how public interest would be harmed by the contracts.
