Trading on U.S. election prediction markets is growing fast before the 2026 midterms.

At the same time, states are trying to ban these platforms as unlicensed gambling.

Election officials worry that heavy betting could hurt public trust in democracy.

Jared DeMarinis, Maryland’s election administrator, called it "a troubling trend."

He said officials across the country must deal with it.

Platforms like Polymarket and Kalshi let people buy and sell contracts.

These contracts are priced between 1 and 99 cents.

They cover races from mayor to U.S. Senate.

Company officials say this is not gambling.

They say it is like trading stocks to protect against election results.

They note that federal law requires protections against insider trading.

They also point to research showing their odds match real results closely.

Still, the markets have had problems this year.

They favored a losing candidate in Wisconsin’s governor primary.

In Los Angeles, influencers used market odds to falsely accuse officials of cheating.

Courts are now deciding if states can regulate or ban these markets under gambling laws.

But rulings are unlikely before the election.

Billions of dollars may trade on questions like which party will control Congress.

Officials are preparing public education campaigns.

They want to stress that market odds are not polls or vote counts.

Some counties are adding prediction-market betting to worker oaths.

Analysts also warn that wealthy partisans could bid up odds to sway voters or help candidates raise money.

Platform officials say financially motivated traders quickly fix any manipulation.