Not all bets are made with big money. On the night of the midterms, one small Kalshi wagerer puts his chump change—and his sanity—on the line.Illustration by João FazendaYou’re reading The Talk of the Town: fun, fizzy dispatches from the city and beyond.The midterm elections furnished prediction markets with nearly two billion dollars in bets, a tidy sum for a teetering democracy. A Los Angeles-based trader named David Bensoussan, whose day job is in real estate and whose politics are left of center, bet more than a million and a half dollars on upward of a dozen outcomes, including the Democrat James Talarico winning the Texas Senate race ($114,000) and Democrats controlling the House ($662,000).Most bettors put less on the line. Andrew Schaefer, a forty-two-year-old father in Orlando, Florida, who helps people out of tax messes, also likes to wager on elections. He tends to vote Republican, but clarified that he is “not someone who thinks Q talks to him in his dreams.” Of political betting, he said, “It’s a hobby for many, a side business for some, and just a way to bet on red versus blue for the majority. Then, there are people like me, who are, like, ‘There’s money that’s still chasing the shoo-in candidate but not pricing in the tail risk.’ ” Translation: most bettors were picking the favorites and undervaluing upsets. Schaefer continued, “There’s lots of money on the sidelines from bettors who did well in the previous cycle, and now they’re a little bit looser with it, so they’re going to bet on the team they always bet on.” In other words, they’re partisan bettors. “That’s when there are opportunities,” he said. “It’s a game of chess.”Schaefer wasn’t going to bet only on his team; he’d won more than thirty thousand dollars in two of the past three Presidential elections, largely by putting his money on Donald Trump in 2016, when it made sense to do so, and by not betting on a Trump blowout in 2020, when it didn’t. Early on Election Day, Schaefer posted on X that 2016 and 2020 “were ‘leave the casino way up’ moments for me.” Of wagering this year, he said, “It’s just one drink, for old time’s sake.” He decided to put money on the Florida gubernatorial race. He chose David Jolly, a former G.O.P. congressman turned Democrat who faced Byron Donalds, a Black MAGA congressman.“I’ve got a thousand bucks to play around with,” Schaefer said. His rationale for placing five hundred on the Florida race: “When I put the money down, a couple of hours ago, it was, like, a thirty-eight-per-cent chance that Jolly would win. I would say it’s more like fifty per cent.” Donalds’s nomination felt to Schaefer “like an anointment, not a choice.” He went on, “Donalds hasn’t campaigned well, hasn’t debated, and isn’t particularly experienced.” Schaefer planned to hedge with some smaller plays: the Senate races in Kansas and Texas, he reckoned, would both go Republican. He put a hundred on each, believing that market pricing had been skewed by “blue-team money sloshing around.”“I have absolutely no idea about the Kansas candidates for the Senate,” Schaefer admitted. “I feel like I’m the Area Man from The Onion who’s, like, ‘Well, actually, I’m a firefighter—but I do bet about twelve thousand a year on pro sports.’ ”On Election Day, Schaefer had a lot going on at work and a very pregnant wife to tend to. She wasn’t interested in his bets. “Not looking good,” Schaefer said via text, appending a laughing-crying emoji, when he saw the early returns from Florida: Donalds was closing the gap on Jolly’s early lead. “But that’s the thing with playing the odds,” he went on. “If a bet is underpriced at 65% when it should be 50%, you’re still going to lose half the time.”Donalds won; Schaefer lost. The good news: his two other bets—which would have been losers—were never filled. He texted, “The fun thing about prediction markets is that you can lose $500 yet manage to convince yourself that . . . you were actually smart for losing $500!” Still, he said, it was his worst political-betting performance ever. He wasn’t alone in drawing one conclusion from his bad night: “Trump has been quite the disappointment.” ?