Prediction markets’ political forecasts falter amid unexpected Dutch election results

Prediction market participants misjudged the Dutch election outcome as the centrist party matched the far right in seats

The Dutch general election held on October 29 exposed a significant gap between the expectations set by prediction markets and the actual voting results. Despite Geert Wilders' far-right Party for Freedom (PVV) being widely considered the frontrunner before the vote, it did not achieve a majority. Instead, the centrist Democrats 66 (D66), under Rob Jetten's leadership, ended up tied with PVV, each securing 26 seats in the 150-seat House of Representatives, according to a

. This outcome contradicted the forecasts from platforms like Polymarket and Kalshi, where traders had strongly backed Wilders' party until a late surge by D66 shifted the narrative, as highlighted in a .

Wilders and his PVV, who had led in the polls for months, experienced a loss of 11 seats compared to the 2023 election, representing a notable setback for the anti-immigration leader, as a

explains. The PVV's decline was linked to a changing political environment, with more voters turning to centrist and left-leaning parties amid worries about the effects of populism on governance and European stability, according to an . D66's surprising gains reflected a public preference for practical solutions to urgent challenges such as housing shortages and healthcare expenses, as covered by an .

The error made by those trading on prediction markets revealed underlying biases and a tendency toward overconfidence. On Polymarket, contracts predicting a PVV victory remained unchanged for weeks, even as new polls indicated D66's growing support. Accounts like "WhiteLivesMatter" held significant positions despite Ipsos and Peil.nl surveys showing D66's momentum, according to CoinDesk. When exit polls confirmed D66's lead, those betting on PVV suffered heavy losses, while traders who adapted to the latest polling data earned substantial profits, as reported by CoinDesk.

Experts pointed to deeper problems within prediction markets, where strong beliefs often outweigh objective analysis. "Markets became more about ideology than accurate forecasting," one analyst observed, noting that limited liquidity and trader psychology turned the Dutch election into a live demonstration of market irrationality, as described by CoinDesk. This stands in contrast to the U.S. presidential race, where a single prominent trader, "Theo," used private polling to successfully anticipate Donald Trump's win, showing how individual insights can sometimes challenge collective thinking — another point raised by CoinDesk.

The political consequences of the Dutch election are also significant. With no party holding a majority, forming a government remains an open question. As the largest party, D66 will have the first chance to build a coalition, but leaders from various parties have ruled out working with Wilders' PVV, according to the New York Times. This reflects a broader European pattern of centrist and leftist parties resisting far-right influence, even as Wilders' anti-immigration stance continues to influence policy debates, as noted in the Guardian column.

For Wilders, the result is a tactical loss but not a complete defeat. His party is still the second largest in parliament, and he has continued to emphasize his combative style, claiming the results support his approach, as reported by the New York Times. Meanwhile, D66's achievement highlights the appeal of centrist pragmatism in a divided political climate, with Jetten presenting his win as a move away from "grumpy hatred" toward effective governance, according to ABC News.

As coalition talks begin, the Dutch election stands as a warning for those relying on prediction markets. The difference between data-driven predictions and actual outcomes demonstrates the complexity of democratic systems, where changing public opinion and local factors often defy algorithmic forecasts, as CoinDesk concludes.