How Political Prediction Markets Prediction Markets Work: A Practical Guide
Election season fills every feed with percentages. Take a hypothetical race: a poll puts a candidate at 48% support, a forecast model gives them a 61% chance of winning, and a contract on the same race trades at 70 cents.
All three numbers can be accurate at once, because each answers a different question.
Political prediction markets turn an election outcome into a contract that people can buy and sell.
This guide explains how those contracts are structured, how their prices form and settle, what trading costs, and what to check before deciding whether a regulated platform fits how you follow the 2026 midterms.
Key Takeaways
- A political event contract is usually a yes/no contract with a fixed payout, commonly $1, that settles once the election result is determined under the contract’s rules.
- A contract price reflects traders’ collective expectation of an outcome. It is not a vote share, a poll result or an official forecast.
- Polls and prices measure different things, and both carry error. National presidential polls in 2024 missed by 2.6 points on average.
- Fees, settlement sources and eligibility rules vary by platform, so check them before placing an order.
- Federally regulated platforms operate under CFTC oversight, with exchange rules against manipulation and insider trading.
What a political event contract is
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The Commodity Futures Trading Commission (CFTC) describes event contracts as products that are often built on yes/no scenarios.
Each contract has a fixed payout, usually $1, and an expiration tied to either a set time or the natural end of the event.
In politics, the event is an election outcome. A contract might ask which party will win a Senate race, who will become a party’s presidential nominee, or how many seats a party will hold after the midterms.
If you hold a position on the outcome that happens, it pays out when the contract settles. If you hold a position on any other outcome, it pays nothing.
Some contracts go beyond a single yes/no question. A seat-count market splits the possible results into ranges.
A combo contract pairs two outcomes, such as a governor’s race and a Senate race in the same state, and pays only if both happen.
How prices form, and why they differ from polls
The CFTC uses a simple illustration. Suppose a “yes” position on a $1 contract costs 70 cents. If the event happens, the holder collects $1 at settlement, a 30-cent profit before fees.
If it does not, the 70 cents is lost. Because buyers and sellers set that price, the CFTC notes it reflects traders’ perceived probability of the outcome.
A poll works differently. The American Association for Public Opinion Research (AAPOR) stresses that pre-election polls can help set expectations but are not predictions of election outcomes. A poll estimates support among a defined group of people during the dates it was conducted.
| Poll | Event contract price | |
| Question answered | Estimated support among a defined population | Traders’ collective expectation that a defined outcome occurs |
| Source of the number | Responses from a selected sample | Prices set by buyers and sellers |
| Time reference | The dates responses were collected | The moment the price was quoted |
| Main limitation | Sampling error and differences in who responds | Reflects the views of people trading, weighted by what they commit, not a representative sample of voters |
Both numbers carry uncertainty. AAPOR’s evaluation of 2024 general election polling, released October 29, 2025, found that national presidential polls missed by 2.6 percentage points on average and state-level presidential polls by 3.0 points.
It also found that, for the third presidential cycle in a row, polls underestimated Republican support. Those figures describe past polling error. They do not score prediction markets or predict how polls will perform in 2026.
Markets have their own limits. Prices can move sharply when few people are trading or when news shifts expectations. A quoted price also includes the spread between buyers and sellers, so the prices for the two sides of a contract can add up to slightly more than 100%.
Read a displayed percentage as the current quoted price, not a precise probability.
How political contracts settle
Before reading anything into a price, open the contract’s rules. Four details matter most:
- The exact condition that counts as “yes”
- The expiration time
- The source used to determine the result
- What happens in unusual cases, such as a withdrawn candidate, a recount or delayed certification
Two contracts with similar titles can settle differently.
The CFTC says customers are entitled to timely information on contract terms, including the payout, prices, and how settlement is determined and by whom. You also are not locked in until Election Day. A position can be sold before settlement at the current market price, which lets a trader take a gain or limit a loss as expectations change.
What the politics hub offers
Fanatics Markets gathers its election contracts on a single politics hub, which makes it practical for following politics betting odds across the 2026 cycle in one place.
The hub covers control of the House and Senate, a combined balance-of-power market, and individual Senate and governor races across many states.
It also lists 2028 contracts on presidential and vice-presidential nominees and the overall winner.
Florida readers can follow separate listings for the 2026 Florida Governor and Florida Senate elections.
Beyond single-race markets, the hub includes seat-count contracts, such as how many Senate seats Democrats will hold after the midterms, and governor-Senate combos for several states. Combo orders are priced through a request-for-quote process, in which the exchange asks liquidity providers to respond with executable prices.
On the board, each outcome shows its quoted price as a percentage alongside the payout on a $100 position.
For example, a side quoted at 70% would show a payout of about $143 on $100, before fees. Activity on the platform can also earn FanCash and tier points for Fanatics ONE loyalty members, subject to that program’s terms.
Florida appears on the platform’s list of 22 states and four U.S. territories where it is live, and individual customers must be at least 21.
What it costs to trade
The fee disclosure effective September 2, 2026 sets a trading fee between $0.00034 and $0.02 per contract, charged on each contract bought or sold.
Fees are highest for contracts priced in the middle of the range and fall toward either end.
For example, a contract priced anywhere from 20 to 80 cents carries a $0.02 fee. So buying 100 contracts at 50 cents costs $50 plus a $2.00 fee.
The total fee is rounded up to the next whole cent across the order, so a single-contract order can carry a $0.01 minimum even when the per-contract rate is lower.
Funding costs vary by method:
- ACH deposits are free.
- Debit card, Apple Pay, PayPal and Venmo deposits can carry a fee of up to 2%, disclosed at the time of deposit.
- Withdrawals to one of your payment methods carry no fee.
- Wire deposits are available for amounts of $1,000 or more, and wire withdrawals for amounts of $10,000 or more.
The platform’s own disclosure states that trading involves significant risk and is not appropriate for everyone.
The CFTC’s guidance points the same way: trade only with money you can afford to risk after living expenses and savings are covered.
Regulation and your protections
Regulation is one of the main things that separates a federally overseen prediction market from an informal forecasting site.
The platform’s footer identifies its operator as Morton St. Trading Investments, LLC, a CFTC-registered futures commission merchant and NFA member, with contracts offered through Crypto.com | Derivatives North America.
The CFTC explains several protections that come with that structure:
- Regulated exchanges must follow core principles designed to prevent manipulation and insider trading.
- Futures commission merchants must follow customer protection rules, including rules on customer funds.
- The exchange and broker do not take the other side of your trade.
- The National Futures Association adds its own rules and enforcement for brokers.
- Customers can file complaints with their broker, the exchange, the NFA and the CFTC.
When the platform launched on December 3, 2025, Fanatics said it would give customers tools to help manage exposure and trade responsibly. Check the current app settings to see which controls are available to you.
Is this platform a fit for you?
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A short checklist can help you decide.
It may suit you if:
- You are 21 or older and live in a state where the platform is live.
- You want House, Senate, governor and 2028 contracts in one app, including Florida’s statewide races.
- You already use other Fanatics products and value the loyalty program.
- You have read the fee schedule and the specific contract rules.
- You are trading with money you can afford to lose.
Compare before committing if:
- You already hold an account with another regulated venue, such as Kalshi. Compare market coverage, fees and settlement sources race by race.
- You mainly want to follow the midterms. You do not need a funded account to track polls, forecasts or official results.
Conclusion
Political prediction markets give readers another way to see how expectations about an election shift over time. Many of the decisions that shape daily life in Central Florida, from an expanded county commission to a property-tax measure on the November ballot, are also worth following through the work of Central Florida’s political leaders. A contract price, a poll and a forecast model each answer a different question, and none of them is an election result.
If you decide to trade, start with the contract rules, the fee schedule and your own risk limits. Then treat each quoted price as a snapshot of the market at that moment, not a forecast you can rely on.
FAQ
Does a contract trading at 70% mean the candidate will probably win?
It means traders, at that moment, were willing to pay about 70 cents for a $1 payout if the candidate wins. It is a market estimate that can change with new information, not a vote share or a certainty.
Can I sell a political contract before the election?
Yes. Positions can be traded before settlement at the current market price, which may be higher or lower than what you paid.
Who decides how a political contract settles?
Each contract’s terms name the settlement source and how the result is determined. Customers are entitled to see those terms before trading.
Can Florida residents trade political contracts?
Florida is on the platform’s list of supported states, and customers must be at least 21. Eligibility is confirmed when you open an account.
