Democrats upset at Trump’s agenda have a glimmer of hope in the 2026 midterms. Five months into Trump’s second term, CFTC-regulated prediction market platform Kalshi gives Democrats about a 4-in-5 chance of flipping the House of Representatives.
There are a few sources of momentum working in Democrats’ favor. The opposition party benefits from the “buyer’s remorse” of voters put off by the shortcomings of the party they chose in the presidential election.
Trump’s policies also risk his working class support, which is a key constituency that Democrats have been working to win back since Trump’s first presidential victory. Steve Bannon, CEO of Trump’s 2016 campaign and former strategic advisor, criticized the big, beautiful bill that cut taxes on the wealthiest Americans.
“I’m very concerned about the deficits in the short term…and I’m very upset,” Bannon said.
If Democrats return to power, they could press for the kinds of tax increases that would benefit Trump’s base. Democrats could also try to impeach Trump for a third time. And right now, you can put real money on your political predictions at exchanges like Kalshi.
Third Trump impeachment a coin toss
Kalshi’s odds of a third Trump impeachment sit at about 46% at time of writing. While one Democratic House Representative, Shri Thanedar, has already filed articles of impeachment against Trump, Democrats lack the majority to impeach the president. A Republican Senate and the inability of Democrats to secure a supermajority prevent Trump from being removed as a consequence of impeachment.
However, Trump’s meme coin could also land him in trouble with the House after 2026. His Trump coin allows donors from anywhere in the world to make anonymous donations, preventing voters from knowing which interests are most invested in Trump’s presidency.
His tariff fight also revealed attempts to profit from the presidency. For example, Vietnam approved a Trump golf course in its country as part of a negotiation tactic over tariff rates. Personal enrichment could form the foundation of a successful impeachment inquiry, especially if Trump’s tax cuts for the wealthiest Americans enrage working class voters and Democrats leverage that outrage after the midterms.
But that scenario requires a lot of “ifs” to occur.
Broader corruption concerns, potential for new markets
Concerns about putting profit over service aren’t limited to the White House. CA gubernatorial candidate Kyle Langford placed a wager on Kalshi on himself to win, and then encouraged his supporters to bet on his victory.
Langford’s bet on himself comes at a time when a Republican president is raising concerns about a president’s ability to personally profit from the presidency. Historian Anne Applebaum has raised concerns around President Trump’s conflicts of interest, from the golf sponsors from countries who seek favorable policies from the president to Trump’s cryptocurrency. And that was before Qatar gifted a luxury jet for Trump’s use as Air Force One.
The way Kalshi adjusts its know-your-customer protocols for its election markets will help determine those contracts’ longevity. Even a CFTC Chairman supportive of election contracts would have to confront how closely a candidate for office matched the definition of an “insider” in DCM rules.
However, a successful implementation of updated KYC protocols could make it possible for other prediction markets, like ForecastEx, to expand their election contracts to consequential gubernatorial races. Conversely, ForecastEx could win the race to stronger know-your-customer policies for Kalshi to imitate.
Whether commercial prediction markets rise to the challenge remains to be seen. Kalshi’s investigation of Langford’s wager is ongoing.
