Prediction markets price in Democratic sweep as midterm contract volume tops $1.48bn

US prediction market platforms entered election day with traders leaning toward Democratic control of Congress, according to figures reported by iGaming Business. As of 9am ET on Tuesday, Kalshi gave the Democrats a 75% chance of winning both the Senate and the House of Representatives. A split outcome, with Democrats taking the House and Republicans keeping the Senate, was priced at 20%. The sweep contract had recorded notional volume above $107.8 million at that point.

Other platforms showed similar sentiment. On Polymarket's US platform the probability of a Democratic Senate win stood at 77%, while its offshore site put the figure slightly higher at 78%. On Monday afternoon, DraftKings Predictions traders gave the party a 76% chance of controlling at least 51 seats, the number needed to take the chamber, and put the likelihood of a Republican win at roughly 27%. Odds on Democrats regaining the House were far above 90% at major prediction markets.

The growth of election contracts was a major topic at two industry events in recent weeks, Predict 2026 and NEXTPredict. At the latter, held at Hudson Yards in Manhattan, former Meet The Press moderator Chuck Todd warned that inexperienced retail traders could suffer heavy losses on election night if they failed to follow exit polling in real time.

Multi-step conditional contracts were another widely discussed subject. These derivatives require a specific prerequisite, or trigger event, before the contract becomes valid. Polymarket is offering several conditional contracts tied to a Democratic sweep. One asks whether a Democratic candidate will win the 2028 presidential election if the party sweeps Congress, and stood at 73% on Tuesday morning. Others, conditional on the same trigger, priced a 35% chance of a US recession by the end of 2027 and just 3% for a US-Iran ceasefire lasting through 2027.

Close Senate races were expected in at least four Midwestern states: Michigan, Ohio, Kansas and Iowa. That made it likely that Senate control contracts would not be settled by Wednesday morning. Overall, trading on US prediction markets has risen sharply since the midterms two years ago, with notional volume on this year's midterms across all operators exceeding $1.48 billion as of Tuesday morning.