Jamie Raskin Is Shocked About Election Gambling on Kalshi!
How prediction markets are more accurate than public pollsters
With my apologies in advance for butchering the classic poem about Santa Claus…
‘Twas the week before Christmas, and all through the House (and Senate) Democrats, some creatures were stirring, led by a mouse from Maryland named Jamie Raskin (D-MD), who introduced a bill in Congress that, if passed, would make betting on elections illegal in America.
Wringing his little paws, in a press release on Dec. 18, Raskin explained, “Our democracy demands reliable and transparent processes to cast ballots and tally results, not a horserace clouded by gambling odds and bets placed.”
Sounds noble.
Although, I’m not sure when the traditional term “horserace” used in reference to political campaigns came to suggest some kind of terrible taboo. Also, nowhere in Raskin’s announcement does the congressman explain how gambling on elections interferes with the “casting of ballots or tallying of results.”
He just dangles the specter out there, as if somehow there’s an obvious direct connection between election betting markets and the way free and fair elections are conducted, i.e. with only legal votes counted and tabulated—one citizen, one vote.
Shoveling More BS
In the same press release, Raskin’s bill co-sponsor in the senate, Jeff Merkley (D-OR), takes a stab at the issue with similar hyperbolic flourish, describing a hypothetical scenario whereby legalized gambling could undermine the integrity of elections.
“Betting on elections degrades them from an investment in leadership to a profit-maximizing game,” says Merkley. "In addition, this practice is corrupt since those betting can influence the outcome by funding late-cycle smear campaigns. It’s like betting on a baseball game when you control the umpire.”
Let’s just leave aside the cringe-inducing phrase, “investment in leadership,” whatever Merkley means by it. I could think of one or two examples of the types of investment that congressional leaders receive which are less than reassuring for the voting public.
The one specific, non-metaphorical risk that Merkley mentions—separate from his vague, scary references to the evils of “profit making” or tampering with America’s great pastime of baseball—concerns the possibility of “late-cycle smear campaigns.”
Now, I ask you, since when did dirty-trickster political operatives need the recent emergence of election-betting markets to spread rumors and lies about a candidate right before election day?
October surprises have been occurring forever, and presumably will continue, whatever happens to the Ban Gambling on Elections Act legislation, introduced last week by Raskin et al.
Playing the Public
Anybody with at least a semi-functioning brain who follows politics and media understands that poll results are used to manipulate public opinion, to sway elections results.
It’s pretty simple Mass Psychology 101, the way this game works.
A sizeable percentage of people simply want to vote for candidates they think are most likely to win. (America loves a winner!) So, dishonest pollsters on the payroll of one campaign or another use cooked poll results to persuade voters about who is the most likely candidate to win, as election day approaches.
Also, there’s also another segment of low-energy voters who may support a candidate based on their policy positions, but who can be persuaded to believe, based on massaged poll results, that their favorite choice doesn’t stand a chance of winning.
So, they just don’t vote at all.
Depending on who’s funding a poll and which candidate they want to promote, pollsters can cherry pick the demographic profile of potential voters they survey, spin the way poll questions are phrased, and massage how survey results are interpreted to arrive at an election forecast they want the public to hear.
This isn’t to say that accurate, “scientific” polls aren’t possible. They are. And candidates regularly rely on them to formulate their own campaign strategies. But these “internal” polls aren’t the ones we mostly hear about in the media.
We get the poll results they want us to hear, designed to affect public sentiment and either get out the vote, or to discourage it, depending upon the race.
Pollsters in Denial
In election after election, major pollsters whose data are publicly broadcast in the months and weeks leading up to voting day have proven to be wildly inaccurate. And yet, they rarely if ever acknowledge their abysmal performance after the fact.
They simply move on to the next election cycle in which they pose again as reliable, unbiased providers of information on who’s ahead and who’s behind among all the candidates in a horserace, as election day approaches.
To prevent their total loss of credibility, mercenary pollsters rely upon the fruit-fly memory spans of voters (and a large percentage of journalists who are supposed to be expert observers) to save their brands from fatal reputation damage.
In the rare cases where big polling/media companies admit after an election how far off their predictions were from actual outcomes, they usually offer bogus excuses involving strange anomalies or historically unprecedented voter behavior, which couldn’t have been reasonably forecast.
A Simple Proposition
Many voters today are getting wise to this game and seeing through attempts by big media and affiliated polling operators, who spin misleading narratives about the state of public opinion on political candidates at any given point in a race.
A lot of these wised-up folks see an opportunity to turn the tables, using new prediction betting markets like Kalshi, to beat the big-money spinmeisters at their own game.
If you don’t know how these new online markets work, and how they present a new way to gauge likely election outcomes, it’s simple:
· Essentially, these platforms enable players to bet on either “yes” or “no” for a given proposition such as, “Will Candidate X win the election.”
· For every contract worth a total of $1 dollar that’s based on the proposition, the price of a bet on either side is determined by how many people in total are taking the “yes” or “no” position.
· For example, if I bet on an underdog candidate whom only 3 out of 10 bettors are favoring, and my candidate in fact wins, then my return will be 70 cents per contract that I bought for 30 cents.
· If my candidate loses then I lose my entire wager, and it all goes to the winning-side’s pool of bettors.
Watching the Weather
Now, consider how this type of prediction market offers an alternative to polls as a way to surmise how voters might be leaning at any given time in a campaign cycle.
As with publicly traded company stocks, the price of a prediction-market contract fluctuates up and down over time, leading right up to the defining event—in this case, when one candidate wins the election.
Anyone can observe these up-and-down price fluctuations in real time, because they are publicly visible on the Internet, just like stocks. There’s no requirement to participate financially in the market to observe which way the wind’s blowing.
Unlike political polls, all the participants in the election betting market have backed up their opinions with money, including small fries with ten bucks riding and “whales” staking millions. They’ve all got skin in the game.
Better Than Polls
Let’s face it, Raskin and his crew are sore about the way the recent elections played out, and they’re looking for ways to prevent a repeat in two years. They want to take back control of the media narratives that voters are exposed to, in which gameable polls have played an important mass psychology role for at least a hundred years.
As long as election polls are perfectly legal to fund and conduct, and their “results” are freely broadcast to the voting public, then legal betting markets offer at least one alternative for people to decipher how well various candidates are performing among the electorate.
According to Paul W. Rhode, a professor of economics at University of Michigan, election betting markets accurately predicted 14 of the 15 presidential elections between 1884 and 1940, after which time they were made illegal.
That’s way better than the accuracy of polls publicly released a week before the presidential elections of 2008, 2012, and 2016, for example, which were only 60% accurate in predicting the winners, according to a pair of researchers at University of California, Berkeley.
In the most recent presidential election of 2024, final predictions released by major polls from the New York Times, the Washington Post, RealClearPolitics, FiveThirtyEight, and Nate Silver all incorrectly predicted Kamala Harris would be the winner.
In contrast, starting on Oct. 8 of this year, the Kalshi market consistently and accurately predicted for a month preceding the election that Trump would win the White House.
Still, Raskin et al want to protect us from Kalshi’s corrupting gambling influences, while saying nothing about the legal right of big-money-backed pollsters to fill the media with misleading descriptions of where the voting public really stands.
Behind his dire warnings, there’s a sneaky, unspoken inference that maybe Harris would have won if Kalshi hadn’t come into play, launching online several weeks ahead of the election as it did, after winning a lawsuit against the Consumer Futures Trading Commission.
Shocked to Discover!
Watching Raskin et al trying to take down election gambling markets, you’d think that money wasn’t the mother’s milk of politics. Or, if it is, that these evil new betting platforms like Kalshi threaten to spoil the otherwise creamy, wholesome batch.
As if special-interest money from PACs, the strategic use of internal and external polling, and misleading propaganda based on cooked poll results weren’t tools in their own kits, helping them get into power, and stay there.
It’s like that famous line from the classic film Casablanca, when a corrupt French officer played by the actor Claude Rains feigns moral indignation during a police raid on the main character Humphrey Bogart’s casino.
"I'm shocked!” he shouts. “Shocked to find that gambling is going on in here.”