Damon Thayer is a seasoned political figure whose journey from Kentucky Senate Majority Leader to prediction market advocate is shaped by a fascination with data-driven forecasting and market dynamics. After spending more than two decades in Kentucky politics, Thayer transitioned into the world of prediction markets—drawn by their ability to synthesize polls, real-time information, and financial incentives into actionable forecasts. He is currently the Political Director for Prediction News.
Chris Gerlacher, Prediction News political analyst and writer, sat down with Thayer on a recent edition of Prediction Market Movers to discuss his first-hand experience helping to legalize sports betting in Kentucky, his interest in prediction markets, and his thoughts on how the 2025 elections are shaping up. The two also talk about what upcoming election outcomes could mean for future election forecasts and party campaign dynamics heading into the 2026 midterms.
Thayer’s shift into prediction markets reflects his belief that these platforms enable a faster, real-time reading of political dynamics that complement and bolster traditional approaches, making them essential tools for contemporary campaigns and political analysts. What follows is a Q&A containing snippets from the complete podcast.
Watch the full episode here:
Q: Could you recount the sports betting bill saga in Kentucky and your role in pushing it across the finish line?
Thayer: “When PASPA passed the Supreme Court and it ruled that Nevada and Atlantic City, New Jersey could no longer have a monopoly on sports betting and turned it back to the states, I along with a handful of my colleagues immediately came out for the legalization of sports betting in the Commonwealth of Kentucky. But it was not an easy path.”
Thayer described the challenges—navigating opposition, forming bipartisan coalitions, and dealing with unexpected political hurdles:
“It still took…let’s just say some negotiation with colleagues in order to get to the number of votes that I needed.”
Q: What was the public sentiment on sports betting?
Thayer recounted the vocal support for sports betting which had already been passed in 37 other states.
“I’d never seen an issue where people just approached me sort of man on the street and said, ‘When are you going to pass sports betting?’… It was mostly younger males—millennials and Gen Z’s in their 20s and 30s.”
“It enjoyed broad support in polls,” he added. “Even people who weren’t going to be big-time sports bettors were supportive of passing it.”
The bill passed in March 2023 and then came the regulatory rollout, which surpassed expectations from outside observers.
“We put the regulatory authority under the horse racing commission and told them ‘Look, we want to be open for football season’…And we were up and running by September. And I’m proud to have made the first legal sports bet at the Red Mile Harness track here in Lexington. And we had no glitches.”
Q: How did you get introduced to prediction markets, and where does your enthusiasm for them come from?
Thayer: “Last September I started following Polymarket [on X] because I’d seen some mentions…And you could just see that traders were coming in heavy on President Trump. Now some pollsters started in early October saying that Trump was pulling into a pretty good popular vote lead and was starting to win in the six or seven swing states. Some, but not all pollsters.
“But meanwhile, this money is just pouring in – on the Polymarket. And I thought, you know, something’s going on here, and I dug a little bit deeper into it.”
On prediction markets vs. traditional polling
Thayer: “Polling obviously is a predictor of who’s going to win an election, but polling is just usually a three-day snapshot, whereas…these trading markets are congregating all kinds of information, polling, fundraising information. Maybe there’s intel on the ground that things are moving faster and it hasn’t been reported or picked up in a poll.
“When a poll is done, you know, it’s usually a three-day snapshot of hopefully at least a thousand likely voters in a swing state or national presidential race, maybe a national popular vote poll, which is even harder to get.”
He explained how market reactions outpace traditional polls like during a recent Virginia Gubernatorial debate.
“Polling hadn’t kicked in yet to see whether Sears got a little bit of a bump, but you could see that there was some money moving in the markets for Winsome Earl Sears…And the debate had an impact in real time, whereas it probably took seven to ten days for that to be reflected in a poll that did show that Sears had gained some ground.”
Q: Are you expecting other political campaigns to begin using prediction markets as a real-time polling mechanism that may supplement polls?
Thayer:
“Polling is always going to be there…that’s always going to be a tool. But I do think that, especially if you’ve got a market with quite a bit of liquidity…this will be a tool that the bigger campaigns will use.”
He also cautioned, “It’ll be interesting to see if [big donors] use some of their money to try to affect the prediction market to try to benefit their candidate…we haven’t seen it yet, but it’s not something that would surprise me.”
Q: What are the most intriguing political betting markets that you’re watching right now (besides the NYC Mayor race)?
Thayer: “To me, the big race is the New Jersey governor’s race because Jack Ciattarelli has been really closing the gap on the Democratic nominee. There’s only $5 million (traded so far), still pretty liquid but compared to the NYC Mayor’s race, it’s one-seventh of the volume.”
“Right now, the Democrat you can get at 77 cents; the Republican at 24 cents. I got some action on that the other day…Jack Ciattarelli almost beat the incumbent, Phil Murphy, four years ago…This is an open seat. Mikie Sherrill, the Democrat, is not as good a candidate on paper or in person as Murphy, is not an incumbent, and Ciattarelli’s got a lot of name ID. New Jersey obviously went for Kamala Harris last year, but it was one of those blue states where Trump really closed the gap…”
Lasting effects of 2024 voter shifts
Thayer: “The big story of the 2024 election was Trump swept the swing states…But the underlying story really was how Trump gained in a lot of these blue states: California, New Jersey, New York—because what we were seeing is more people in the suburbs and in the rural areas of these blue states coming to the polls and voting for Trump. There were several notable examples and Hoboken was nationally publicized because of it, and he did better with subgroups in the Democratic party.”
That included minorities and immigrants who supported Trump’s immigration policies including a system for legal immigration and deportation of those who immigrate illegally. But Thayer says the question is whether these voters will show up in elections outside of presidential ones.
“The challenge for Republicans is going to be to convert those Trump voters, especially in swing states or blue states, into regular Republican voters who come out in midterms and off-year elections and are willing to vote for other Republicans. And you know, that might take some time.”
Q: Why are you watching races like Virginia Governor so closely?
“You want to watch trends in places like Virginia…There is an enthusiasm gap right now between Republicans and Democrats and that often hurts Republicans in off-year or midterm elections. If Democrats are more motivated to vote because of their hatred of Trump, then Spanberger is probably going to win by a pretty wide margin. But if Republicans are motivated because of the assassination of Charlie Kirk and what they feel are cities that have become violent because Democrat mayors won’t enforce the law. And you know, Winsome Earl Sears had a great debate and now they see, ‘well she could actually be a good governor’…
“If these things are bubbling under the surface…In Virginia, we’re going to be looking to see if any of these trends, and post- the Charlie Kirk assassination and the gubernatorial debate and just Republicans sort of getting fed up, if that turns into voter enthusiasm, they could make it a close race. And that’s why you’re starting to see the markets starting to take trades based on margin for [Abigail] Spanberger.”
Q: How might the VA and NJ governor races impact Democratic messaging in the post-Harris leadership vacuum heading into midterms?
Thayer explained that the 2025 governor races will be significant signals for two reasons:
“First of all, bragging rights, and that’s important in politics because it helps drive the narrative. So, you know, if the Democrats win New Jersey, it’s a hold, so not big bragging rights. But if they win Virginia, that’s a flip…and they’ll be bragging about it for a couple of weeks. And that’s a significant flip if Spanberger wins. If Winsome Earl Sears wins, that’s a Republican hold.
“And they’re testing their themes. And it’s pretty much ‘we are Democrats and we hate Trump’…There’ll be people looking into if that theme continues to hold water.”
You can follow Damon Thayer on X: @damon_thayer
