Betting Markets Miss the Mark as Pope Leo XIV’s Surprise Election Defies Prediction Logic

This week, the election of Robert Prevost, a Chicago native, as the first American pope, Pope Leo XIV, caught many by surprise. Online betting sites, such as Polymarket and Kalshi, which specialize in prediction markets, were among those caught off guard. These platforms allow people to place wagers on the outcomes of various events, with the belief that betting markets, fueled by monetary stakes, can better predict results in aggregate. Despite their past successes, these sites were blindsided by the conclave’s decision, which had Prevost as a mere long shot, with odds as low as 1-2%.

The Unpredictability of Papal Elections Highlights the Limitations of Prediction Markets

Prediction markets are designed to aggregate the wisdom of the crowd by allowing individuals to place bets on the outcomes of events. These platforms have been proven effective in some cases, such as predicting the 2024 U.S. presidential election with more accuracy than traditional polls. However, the election of Pope Leo XIV was a notable exception. Both Polymarket and Kalshi predicted Prevost’s chances as exceedingly slim, with a few lucky bettors turning modest investments into significant profits. This outcome underscores the unpredictability of certain events, even in markets designed to forecast them.

While betting markets can often make accurate predictions, they have a mixed record. For example, they correctly anticipated the outcome of the 2024 U.S. election but missed on major events in 2016, such as the Brexit vote and Donald Trump’s presidential win. The failure to predict the papal election reveals the limitations of prediction markets in certain circumstances. Unlike sports betting or political races, which rely on abundant data and established trends, the papal conclave is a unique and opaque process that cannot be easily quantified or analyzed by traditional methods.

The Difficulty of Predicting Papal Elections Due to Limited Data and Secrecy

In contrast to the wealth of data available for other types of betting, such as sports or politics, the data surrounding a papal election is sparse. As Eric Zitzewitz, an economics professor at Dartmouth College, explained, the papal conclave is one of the most difficult events to predict due to its rarity and lack of transparent information.

Papal elections occur only once every decade or two, and the process itself is highly secretive, making it nearly impossible to accurately gauge the factors influencing the cardinals’ decision-making. The lack of comprehensive data on the conclave’s inner workings contributes to the unpredictability of the outcome.

Ultimately, the failure of prediction markets to foresee the election of Pope Leo XIV points to the limits of crowd wisdom in certain contexts. In this case, the true influencing factor—what Catholics believe to be the guidance of the Holy Spirit—cannot be measured or predicted by conventional means.

Even in markets that are highly liquid and based on the collective insights of many individuals, there are no tools to account for the divine element in the papal election. As Zitzewitz aptly stated, “The Holy Spirit is indeed a wily one,” emphasizing the profound mystery that surrounds the selection of the pope.