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But it isn\u2019t just traditional election predictors that show Harris pulling Democrats back into the race.<\/p>\n
This month, Polymarket, the controversial cryptocurrency betting site<\/a> that accurately called JD Vance being nominated for vice president and Joe Biden dropping out of the race, showed Harris\u2019s odds of winning the presidential election surpassing Trump\u2019s<\/a>. It was the first time Trump\u2019s odds had dipped below 50% since May, and Harris\u2019 probability rose as high as 54% on Aug. 15.\u00a0<\/p>\n Unlike traditional betting sites, Polymarket allows traders to buy and sell shares on the outcome of a given event. Any user can make a market by posing a question with a fact-based resolution. Traders then buy shares depending on which outcome they think is most likely.\u00a0 The share price\u2014or \u201codds\u201d\u2014rise or fall depending on demand, and the contract\u2014or the \u201cbet\u201d\u2014will either rise to $1 and pay out if the event happens the way you predicted, or fall to zero if it does not. Essentially, if you get the answer wrong, your shares are worthless.<\/p>\n \u201cThe way that the prices are set on the Polymarket is just by the trading of the individuals on the exchange,\u201d Harry Crane, a statistics professor at Rutgers, told Fortune<\/em>. \u201cSo it\u2019s very much similar to the New York Stock Exchange, or any kind of stock exchange, in that the prices are set by a bid and an ask.\u201d<\/p>\n While individual bettors in the market may have gaps in their information\u2014or biases\u2014taken collectively, the bets on crowdsourced platforms add up to an extremely well-informed opinion on the outcome of the election, and they might be more accurate than traditional polling, said Crane. The success Polymarket has had predicting political outcomes is somewhat surprising considering that betting on elections is illegal in the U.S., and bettors in the U.S. are technically barred from using the platform. But Crane told Fortune<\/em> that just because the markets are being driven by non-U.S. residents doesn\u2019t make them less reliable. In fact, it might even be an advantage\u2014nonresidents trading on the outcome of the election are less likely to lean Democrat or Republican. In addition, because Polymarket users trading on the election have financial skin in the game, the bettors are likely to be highly informed, said Crane.<\/p>\n Given the high stakes of the upcoming election, sites like Polymarket are seeing surges in trading volume and active users. Trading on Polymarket reached a record high of $380 million in July, up from $110 million in the month before, according to the Block<\/a>, a crypto news outlet.\u00a0<\/p>\n Trump\u2019s odds of winning the election spiked on the site after Biden\u2019s disastrous debate performance on June 28, and continued to climb in the next few weeks.\u00a0 At one point shares traded as high as 72%, meaning a 72-cent contract on a Trump victory would pay $1, in the wake of the assassination attempt against him in mid-July. But since Harris became the presumptive nominee, Trump\u2019s lead has slowly drained away. Contracts for a Trump victory fell below 60 cents on July 26, then below 55 cents on Aug. 1. On Aug. 15, contracts for a Trump win were lower than 45 cents. The decline reversed by Thursday, with Polymarket showing Trump leading Harris 52% to 46%.\u00a0<\/p>\n The relatively new Polymarket isn\u2019t the only crowdsourced prediction site with markets on this year\u2019s presidential election. PredictIt<\/a>, a site that sprang out of a project from Victoria University of Wellington, has been around for a decade. But Polymarket began generating buzz this summer after a string of correct calls ahead of most pundits<\/a>.\u00a0<\/p>\n Even before Biden\u2019s debate performance, bettors were saying there was a 20% to 25% chance he would drop out of the race<\/a>, and three days before Biden made his decision, the odds were at almost 90%. Similarly, the day before the Republican National Convention, Polymarket had Vance winning the VP nomination at 68%<\/a>.<\/p>\n \u201cThe participants in the market, since they have the financial incentive to make money, they\u2019re incentivized to look at all the information available,\u201d he said. That information includes traditional polling, he said,, but it also includes other factors like economic indicators, voter registration, and recent news events.\u00a0<\/p>\n Polymarket did not respond to Fortune\u2019s<\/em> request for an interview.<\/p>\n That isn\u2019t to say prediction markets are always right. In 2016, PredictIt bettors notched Hillary Clinton at an 80% chance of winning the election<\/a>. But that error wasn\u2019t any worse than the polling from sources like the New York Times,<\/em> which gave Trump a 15% chance of winning<\/a> on the day of the election.\u00a0<\/p>\n \u201cIt\u2019s the best available opinion, given all the information we have and given to all the participants who have the information,\u201d Crane said.\u00a0<\/p>\n Betting markets for presidential elections in the U.S. aren\u2019t a new phenomenon. In fact, before scientific polling was well established in the late 1930s and early 1940s, Wake Forest economics professor Koleman Strumpf told Fortune<\/em> that betting markets were where newspapers got their election predictions.\u00a0<\/p>\n \u201cNewspapers would report on this on the front page, pretty much for at least the last month before the election, but usually much longer than that,\u201d Strumpf said. \u201cAlmost every major city in the U.S. had their own market, but the biggest one was in New York, and it literally existed right outside Wall Street.\u201d<\/p>\nHistory of political betting markets\u00a0<\/strong><\/h2>\n