What happens to Polymarket betting if the US election result is contested?

The decentralized prediction market platform Polymarket has clear guidelines for settling bets on the 2024 US presidential election in the event of disputed results.

The platform’s market, which focuses on whether Donald Trump or Kamala Harris will win the presidency, is resolved based on calls from three major news organizations: Associated Press, Fox News and NBC.

Unless all three unanimously declare the same candidate the winner by the inauguration on January 20, 2025, the market will depend on who is officially sworn in as president.

This mechanism addresses potential scenarios where election results are disputed or delayed. Traders’ positions remain unclear until a final result is available. However, as Bitget reported, Polymarket’s oracle system governance token UMA has a market cap of just $244 million, which the markets may be concerned about given the $2.3 billion volume the election market has acquired makes vulnerable.

Are Polymarket’s manipulation concerns justified?

In addition, concerns have been raised about possible “manipulation” of betting odds on the platform. A limited number of accounts have made significant bets in favor of Trump. Newsweek highlighted this, raising questions about how large-scale betting could affect public perception and market integrity during a contentious election.

However, Jim Bianco has also pointed out big bets in Harris’ favor in recent days, temporarily moving the market by as much as 4%.

Additionally, CryptoSlate has reported on the continued bets in favor of Trump by a handful of polymarket whales in recent weeks. The analysis noted that less than $6 million would be required to move the market by large percentages due to the low liquidity of the order book.

Ultimately, Polymarket is a free and open market, and claims of “manipulation” are confusing since the rules on which the market is built do not appear to be abused.

Whether strong conviction or coordinated betting, the next US President’s chances on Polymarket are simply based on the type of trading on the platform. It is far-fetched to speak of “manipulation” in an open market where no technical mechanisms are used to change the odds of winning.

Market liquidation amid contentious elections

As the election approaches, Polymarket’s reliance on the media to resolve the market is leading to discussions about objectivity and possible bias. Media organizations may vary in their forecasts, especially in close races, creating continued uncertainty for traders. As The New York Times noted, this could impact the platform’s ability to provide timely solutions.

Ultimately, the final step of the resolution depends on “who is inaugurated.” If the listed media cannot come to an agreement by Inauguration Day, the market winner will be determined by who ultimately takes over the White House.

If the election dispute continues in court and prevents a presidential inauguration by January 20, Polymarket results could be delayed even further.

Interestingly, the 20th Amendment to the U.S. Constitution provides a framework for what happens if there is no elected president by Inauguration Day. If the President-elect does not qualify, the Vice President-elect will serve as President until a new President is qualified. If neither qualifies, Congress has the power to determine next steps, with the Speaker of the House next in line according to the presidential line of succession

If a contentious election results in House Speaker Mike Johnson taking office, there could be a lot of angry Polymarket traders.

Although this is merely a hypothetical scenario, given the history of the 2020 election, the chances of a disputed outcome in 2024 have increased. Although it is unlikely that neither candidate will be elected on Inauguration Day, the market for whether the election will be certified on January 6 has fallen from 94% to 84% since August.

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