This has been a huge week for Kalshi. We launched several new partnerships. We announced a new $11 billion valuation. And we even minted the world’s youngest self-made female billionaire. But more on that later.

First, I have to write about an off-year special election in Tennessee, because this is the life I’ve chosen.

_{This is an opinion and not financial advice. The author uses a pseudonym and cannot trade on Kalshi.}

Once you start regularly trading on election markets, you’ll start to notice a pretty familiar pattern, especially with off-year or special elections. In the weeks leading up to a race, the news media and political pundits will often showcase the underdog, and play up the narrative of a “potential upset.” And that makes sense, since describing it as a “potential upset” probably generates a lot more clicks than billing it as a “futile gesture.”

But more often than not, prediction markets tell a very different, much less exciting story, and last night’s special election in Tennessee’s deep-red 7th Congressional District was a prime example.

Despite weeks of media hype around Democratic candidate Aftyn Behn, her chances of winning were consistently in the low- to mid-teens, and now that the smoke has cleared, it seems that Trump-backed Republican Matt Van Epps’ victory was never really in doubt. The only real question was his margin of victory. But that, in and of itself, is a very important question as we head into the 2026 midterms.

To most people, last night’s vote totals probably don’t seem like a big deal. After all, a win is a win, whether it’s by one vote or a thousand. And that’s true when you’re talking about an individual race. At the end of the day, Van Epps is going to Washington.

But if you’re a Democratic or Republican strategist looking ahead to next year’s midterms, or simply a trader trying to figure out where to put your money, last night’s numbers become a lot more interesting.

Traders currently price in a 98% chance that Van Epps wins by between 5% and 9.99%. That might seem like a sizable margin, because it is.

But just one year ago, Donald Trump won the district by 22%. So despite the clear victory for the GOP, many are viewing this dramatic swing as a warning sign for the upcoming midterm elections. After all, if a lefty named “Aftyn” can cause that kind of swing in Trump Country, it’s probably very good news for moderate Dems running in swing districts.

Typically, Democrats overperform in special elections, which tend to have low voter turnout. But as the chart above demonstrates, last night’s election saw turnout in the 170,000 to 184,999 range. This puts it on par with turnout for the 2022 midterms, which means Republicans would be wise not to simply use the “special election” excuse to explain away the swing.

In the week leading up to the election, our 2026 House midterm market has been moving slowly but steadily in the Democrats’ favor. On November 26th, they had a 72% chance of retaking the House next year. This morning, that number sits at 78%.

Of course, some of the Democratic gains might be attributed to the fact that GOP redistricting efforts may be stalling, especially in Indiana. But even in our Senate midterm market, the Republicans’ chances of retaining control took a hit.

Last night, the Republican odds of holding the Senate fell as low as 60%. This drop directly corresponded to price spikes in our TN-07 Margin of Victory market, which briefly indicated that Van Epps would win by less than 5%.

But as prices adjusted and it became clear that Behn would lose by a wider margin, Republican odds in our Senate market quickly bounced back and currently sit at 68%. While that’s a much less dramatic shift, it’s still a post-election drop of 4%.

Of course, we’re still a long way off from the midterms, and a lot is going to change between now and then. And despite all the talk about margins and turnout, the GOP still pulled off a clear win. But if our markets are any indication, that win came with some clear warning signs.

A mere two months after securing a valuation of $5 billion, Kalshi is proud to announce a new $1 billion Series E funding round that values the company at $11 billion. And that makes sense, considering weekly trading is up more than 1,000 percent from 2024 and now exceeds $1 billion in volume (click here for all the details).

In hindsight, turning down Kalshi equity in exchange for $100 per month in site credit was probably a bad move on my part, especially since I’m not allowed to trade on the site.

One person who didn’t turn down equity in the company is Kalshi’s co-founder Luana Lopes Lara. Thanks to our latest valuation, the 29-year-old is officially the youngest self-made female billionaire in history, a title previously held by Lucy Guo and Taylor Swift.

In honor of her momentous achievement, she is currently on the cover of Forbes. Click here to check out the entire interview. It’s filled with fun anecdotes about the early days of Kalshi, as well as her time training at the Bolshoi Theater School in Brazil, where teachers would hold cigarettes under her thighs so she couldn’t drop her legs without being burned.

(Side note: The next time you’re complaining about your job, remember that at least you don’t work for a billionaire who was intentionally burned by cigarettes as a kid.)

Last but not least, Kalshi is now CNN’s official prediction market partner. Our real-time odds will be popping up across their coverage, from on-air explainers to a new Kalshi-powered news ticker, helping to better inform their reporting. Click here for more details.

Follow Terry Oldreal on X: @realOldTerry
Follow Kalshi on X: @Kalshi

^{The opinions and perspectives presented in this article belong solely to the author, who is using a pseudonym and cannot trade on Kalshi. This is not financial advice. Trading on Kalshi involves risk and may not be appropriate for all. Members risk losing their cost to enter any transaction, including fees. You should carefully consider whether trading on Kalshi is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk. Information is provided for convenience only on an "AS IS" basis. Past performance is not necessarily indicative of future results. Kalshi is subject to U.S. regulatory oversight by the CFTC.}