Poker Writer
The two biggest predictions markets can’t agree on whether Elon Musk’s America Party officially exists yet or not. Since his falling out with the current administration, Musk has been talking up the possibility of creating a new US political party. Until a few weeks ago, predictions market bettors saw that as a remote possibility, hovering in the single-digit percentages. Over the last few days, Yes shares on Kalshi and Polymarket soared.
Today, however, the situation looks very different on the two markets. Shares for the new party to be official before the end of the year have dropped to 61% on Kalshi. Yet, on Polymarket, they’ve already been resolved as winners and paid out.
One of the major differences between the sites is that Kalshi resolves contracts in-house, while Polymarket utilizes the blockchain-based “oracle” UMA. Any UMA user can declare a contract decided by posting a bond. If no one is willing to dispute the claim by posting a bond of their own to initiate a voting process, it’s deemed correct.
However, in this case, the rules for the specific market varied significantly on each site as well. Kalshi’s standards include confirmation from state election authorities and the Federal Election Commission. Polymarket’s terms require only a public announcement by Musk.
A July 5 tweet that included the words “Today, the America Party is formed” was presumably considered enough to meet Polymarket’s criterion, regardless of the official status of any paperwork.
By a factor of 2 to 1, you want a new political party and you shall have it!
When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy.
Today, the America Party is formed to give you back your freedom. https://t.co/9K8AD04QQN
— Elon Musk (@elonmusk) July 5, 2025
Big Beautiful Bill Irks Musk and Gamblers Alike
The percentage increase has come on the heels of Musk’s recent disillusionment with President Trump’s “Big Beautiful Bill,” which he has criticized extensively on X.
Musk went on X on Saturday to declare his intention to form a third party to challenge the Democratic and Republican parties that currently dominate the United States.
When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom.
US gamblers are also alarmed by the bill’s passage due to an inclusion that would reduce the allowable tax deduction for gross losses. Depending on how the accounting is done, it could render most professional gambling unviable. Nevada Rep. Dina Titus has introduced legislation to reverse that change to the tax code, and her FAIR Bet Act has the support of the American Gaming Association.
Musk’s falling out with Trump has been brewing for some time. However, the question “Will Elon Musk create a new political party this year?” on Kalshi and Polymarket remained consistently below 10% for the entire year until things came to a head over the budget bill.
Kalshi Yes shares rose sharply to 47 cents on July 1, then to a high of 79 cents on Sunday following Musk’s “America Party” announcement. Despite the differences in terms, Polymarket shares tracked Kalshi’s closely up until the market was resolved. Polymarket had also offered contracts on alternative timelines, including “by July 4,” which failed narrowly.
Before announcing the party, Musk held two polls on X, asking his followers if he should proceed with the idea. The first, on July 4, received 65.4% approval. The second, on July 5, used different phrasing and claimed the new party would represent “the 80% in the middle” and, perhaps not coincidentally, saw just over 80% of respondents answering “yes.”
Official Follow-Through Needed for Kalshi Yes Holders
Despite Musk’s seeming assurance that the party will happen, it is not official yet. It’s interesting that Kalshi Yes shares have actually dropped in value, rather than increased, since the Polymarket contracts resolved to Yes.
Bettors taking the No side can point to Musk’s tendency to hype his ideas in a big way, while being more erratic in his follow-through. For instance, in 2018, he publicly discussed taking Tesla private and faced a lawsuit (which he won) for backing away from that idea. He also attempted but failed to withdraw his offer to buy Twitter, which he later renamed X.
Trump has called Musk’s third-party announcement ridiculous:
“I think it’s ridiculous to start a third party. We have a tremendous success with the Republican Party. The Democrats have lost their way, but it’s always been a two-party system, and I think starting a third party just adds to confusion.”
Historical Track Record Not Good for Third Parties
Historically, Trump is correct that the two-party system has had a lock on US politics since the 1800s, with few disruptions. Third-party candidate Ross Perot had some impact on the 1992 and 1996 presidential elections. However, George Wallace’s run in 1968 was the last time a third-party candidate won any electoral votes.
That said, Musk’s outsized following and monetary power mean his “America Party” has the potential to be the biggest disrupter of the two-party system since Theodore Roosevelt’s “Bull Moose Party” of 1912.
There are other parallels between those situations, as Roosevelt splintered the Republican party by running for President after a falling out with Republican incumbent and former friend William Taft. That led to an easy win for Democratic candidate Woodrow Wilson after Roosevelt stole 27% of the vote and 88 electoral votes, leaving Taft with only eight electoral votes.
Tesla investors don’t seem to know quite what to make of Musk’s political aspirations. Shares in the company rose to a high of $488.54 as President Trump, with whom he was then close, prepared to take office. Public backlash over the ensuing months cut the company’s value by roughly half. His subsequent falling out with the President and announcement of the America Party have continued the volatility. Despite a sharp jump on July 2 and a fall on July 8, prices recovered today to put the stock back where it was a week ago.
What a New Party Would Mean
Conventional wisdom suggests that a follow-through by Musk would benefit Democrats by splitting the right-wing vote. His personal politics have made him an unpopular figure on the left, so he would likely draw more Republican voters than Democrats.
Trump does not appear he will be quick to smooth things over with Musk as he told reporters on Tuesday at the White House:
He’s upset that he’s losing his EV mandate and … he’s very upset about things but he can lose a lot more than that.
Image Credit: Debbie Rowe via Wikimedia Commons (license)
