Topline
The odds are slim that President-elect Donald Trump saves TikTok for U.S. users long term, at least according to the prediction markets which became mainstream during the 2024 election, with millions of dollars on the line betting the popular video app will soon go dark for Americans.
TikTok’s days on Americans’ phones may be numbered.
Key Facts
The popular blockchain-based site Polymarket priced in a 81% chance of a TikTok ban going into effect in the U.S. by May, while its rival site Kalshi priced in 87% odds of a ban by May.
Friday afternoon’s more than four-in-five odds of a ban mark a dramatic increase from where they stood before the Supreme Court ruled earlier Friday to uphold the law forcing TikTok owner ByteDance to sell its U.S. operations or face a ban from U.S. devices.
Polymarket priced in just 53% odds of an enforced ban by this spring at 10 a.m. EST, similar to Kalshi’s 54%; both sites placed less than a 40% chance of a ban at the end of 2024.
Polymarket users have more than $4.9 million wagered on whether the TikTok ban goes into place, standing as the site’s sixth-most popular market, while Kalshi users have $1.7 million on the line, making it the platform’s third-biggest market.
Key Background
The ban on TikTok goes into effect Sunday, though President Joe Biden says he does not plan to enforce it on his last day in office. Trump will have the opportunity to extend the ban by 90 days when he becomes president Monday. The pro-TikTok Trump may not have the legal backing for an extension if he can’t prove the Beijing-based ByteDance has made progress on divesting the U.S. operations of TikTok, a possibility priced in by prediction markets. The social media company has insisted it is not for sale, though Bloomberg and Wall Street Journal reported this week Chinese officials have discussed selling TikTok’s U.S. operations to the world’s wealthiest person, Elon Musk, should they pursue such a sale. A TikTok spokesperson dismissed the reports as “pure fiction.” Musk, who donated $239 million toward Trump election efforts last year, or any other potential buyer would likely need to pony up $40 billion to $50 billion for TikTok’s U.S. operations, according to Wedbush analysts, a fraction of Wedbush’s more than $300 billion estimate if ByteDance were to include its addictive algorithm in the sale, which is highly unlikely.
How Polymarket And Kalshi Work
The prediction platforms offer users the opportunity to wager on the outcomes of real-life events, purchasing contracts on either side of the outcome with odds moving accordingly based on the public money, similar to how a company’s share price changes as demand for buying and selling its stock moves. Users betting on the end of TikTok in the U.S. will get paid out if the app “is banned for download and/or use by the majority of Americans” by April 30, while those on the other side of the wager will win “if TikTok is sold to another entity in such a way that it comes into compliance with U.S. laws and regulations, according to Polymarket (Kalshi has nearly identical guidelines). Polymarket, Kalshi and other prediction market sites rose to prominence in 2024 as they placed Trump firmly ahead of Vice President Kamala Harris in the presidential race as polling based models put the race as a tossup. Trump’s son, Donald Trump Jr., joined Kalshi as a strategic advisor Monday, claiming his family used prediction markets “to know we won hours ahead” of news outlets calling the race in his father’s favor.