Are Prediction Markets Politically Biased?

As prediction markets become more prominent, there are concerns that they will be a conduit for political bias. I analyze prediction markets returns from 1880 to 2025 and find no evidence of an overpricing of either left or right-leaning candidates, across a variety of subsamples. In recent elections, there is also no overpricing of either male or female, white or non-white, or young or old candidates. Most political prediction markets exhibit a favorite-longshot bias, and markets on near-term polling averages exhibit a very small overpricing of left-leaning outcomes (e.g., President Trump’s approval falling), which is detectable only because the sample size is large. For elections, however, despite attracting participants who may not be representative of the voting population, prediction markets yield predictions without systematic bias.