Business

The single event that thrust prediction markets such as Kalshi and Polymarket into widespread use was the 2024 US presidential election. Both predicted that Donald Trump would win weeks before the ballot, while most models built by sophisticated pollsters such as Nate Silver showed a victory for Kamala Harris. By the end of election day, over $3.3bn (around R54bn) had been traded on Polymarket, making it the most active market on the platform, to date. Kalshi saw trades on the same market totalling $535mn, or R9bn.

These prediction markets allow participants to trade contracts, typically mostly with binary – yes or no – outcomes. In May, the combined trading volume on these markets reached a record high of R24.8bn (R460bn). This is not far off the roughly R600bn to R700bn traded on the Johannesburg Stock Exchange each month.