Before Kalshi and Polymarket there was the Iowa Electronic Markets

Prediction markets aren't new. Election betting was common until the 1940s, then mysteriously faded away.

There was an entire political era when party bosses were expected to conspicuously gamble on their candidates (even if they secretly hedged).

And in the 1980s, a few economists designed an election market that beat out election polling 74 percent of the time.

Today, we're running an excerpt from our friends at Throughline, NPR's excellent history podcast. Subscribe right now if you don't already. And, listen to their extended version of the episode to hear about the early markets for betting on terrorism and military uses of prediction markets.

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Today's episode was produced for Planet Money by Sam Yellowhorse Kesler, edited by Alex Goldmark, and engineered by Maggie Luthar. The original Throughline episode was produced by Rund Abdelfatah, Casey Miner, Cristina Kim, Devin Katayama, Sarah Wyman, Julia Redpath, and Kyana Moghadam.

Music for this episode was composed by Ramtin Arablouie, and his band, Drop Electric, which includes Navid Marvi, Sho Fujiwara, and Anya Mizani.