Carrying out surveys has traditionally been the most accurate way of understanding current public sentiment and calculating where future trends could take us. Yet, the emergence of prediction markets provides data scientists with a fresh new way of getitng to grips with the same data.
We can start this comparison by looking at how surveys have been used in the past to get a feel for the outcome of political events, sports, and even entertainment awards ceremonies. This has generally provided accurate results in the past, although there have been some famous examples where the surveys got it completely wrong, such as the 2020 US presidential election.
To accurately and efficiently work out the national opinion on a major subject in the United States, it’s estimated that between 1,000 and 1,500 people need to be surveyed. Not every polling organization works in the same way, with some working online while others ask their questions over phone calls or face-to-face.
What most have in common is that the people they survey are usually chosen at random, although some will target specific groups to get a broad mixture of opinions. 19 places across the country voted for the winner in every US presidential race between 1980 and 2016, but Clallam County is the only one that also correctly predicted national opinion in 2020. Known as bellwether counties, these places are often used for predictions, yet it’s not clear why these counties are so often in line with national opinion.
Online prediction markets are often far more accurate than surveys for a variety of reasons. The first reason is that they react instantly to any major news stories, such as debates or breaking scandals, and traditional polls may lag several days behind. The data is updated as new predictions are made, meaning that the numbers reflect the changing situation at all times.
The best prediction markets to choose from include names like Kalshi, Novig, and Polymarket that operate across the US. Since prediction markets are based on trading contracts rather than betting, they're available even in many of the states that don't accept legal sports betting. These platforms offer new users a welcome bonus that they can use to explore a variety of sports, political, and entertainment prediction markets. This is a peer-to-peer trading model with no house edge, where each user simply trades their predictions according to their current opinion.
Both surveys and prediction markets look to see future outcomes use the wisdom of the crowd theory, which states that a large, diverse group of individuals will always give a more accurate answer than an expert or a small group of experts. This theory has been tested in areas such as asking people to guess the weight of an animal at a country fair, with the average estimate typically being surprisingly close to the real answer.
This means that data scientists can now access up-to-the-minute data for many major events just by looking at the prediction markets. As the industry grows with more events and users added, we can expect to see the quality of data collected in this way continue to grow.