Trump Conviction Barely Dents His Odds of Winning Election: Prediction Markets

Trump’s conviction on criminal charges did little to impact his chances of winning the election, according to prediction markets. On Polymarket, where the election contract has reached $150 million in bets, the value of the “yes” contract only dropped by one penny after the guilty verdict. Trump’s probability of winning decreased by around two percentage points week-over-week, but on the day of his conviction, it only lost one percentage point. Despite this, Trump still holds a 16-point lead over President Biden on Polymarket, which is significantly higher than the polling averages. On PredictIt, another betting site, Trump’s contract even gained one cent following the guilty verdict, although his lead over Biden is narrower at 51-48. The prediction markets also suggest that Trump is unlikely to face prison time for his crime, aligning with the sentiment of legal experts. Bettors on Polymarket give a 76% probability that Trump will not go to prison, an 18% chance of receiving less than a year, and a 2% chance of receiving one to two years. In contrast, traders on Kalshi and Polymarket are not pricing in a rate cut, which differs from the CME FedWatch poll that anticipates at least one cut by the fall. Kalshi bettors are giving a 32% chance of no cuts and a 29% chance of one cut, while Polymarket bettors are split between zero and two cuts, each with a 30% chance. The divergence between prediction markets and the CME FedWatch will be worth monitoring to determine which group has a better understanding of market dynamics.