I would love to see a graph of the total amount of money sloshing around in prediction markets in 2021, 2020, 2019, etc. stretching back as far as we have data. I’m wondering whether there is a trend and if so what the growth rate is. My Google-fu is failing me so I’m asking here in case anyone else knows.
I think this is going to be a difficult question to give a concrete answer to. (For many reasons: data isn’t public, growth is very lumpy)
Probably the best approximation I can think of would be betting volumes in equivalent events over time.
US Presidential elections matched volumes on Betfair (in £):
* 2008: ~15mm (Source)
* 2012: ~40mm (Source)
* 2016: ~200mm (Source)
* 2020: ~1700mm (~600mm pre-event which is possibly more relevant)
That’s a ~40x over 12 years, or ~35%/year.
We’ll get another data point after the French Election this year and I guess it would be interesting to look at some other comparable events. (UK General Elections).
Another place we could look at is volumes on PredictIt, although that’s really just a proxy for number of markets. You could also look at volumes on Polymarket or one of the other crypto exchanges.
Thanks!!! Why is the pre-event more relevant?
The prediction market after the event was ~ a betting market on “Will the election results be upheld?” rather than “Who will win the election on election night?”. We were comparing those markets to similar markets earlier (“who will win” markets) rather than “Will election results be overturned?”
There is a new CFTC-regulated prediction market to add to this list: https://kalshi.com/.
This is a chart of PredictIt volumes for markets I can find data for. I assign the volume to either the last day it was open (if that data is available) otherwise the close date on the market definition.
This tells a similar story to Betfair on “2016 vs 2020” and also illustrates the point I was trying to make about this being a tricky question—almost a large fraction of the volumes are coming during a few key events.