With just a week before South Africa’s 4 November local government elections, prediction market platform Polymarket is putting odds on who could lead the country’s eight metropolitan municipalities.
As of 27 October, Polymarket gave Democratic Alliance (DA) candidate Geordin Hill-Lewis a 96% chance of remaining Cape Town mayor, while Helen Zille had a 52% chance of becoming Johannesburg’s next mayor.
The platform also has markets for Nelson Mandela Bay, Tshwane, eThekwini, Ekurhuleni, Buffalo City and Mangaung.
In Nelson Mandela Bay, Babalwa Lobishe was on 32%, narrowly ahead of Retief Odendaal on 31%. In Tshwane, Cilliers Brink led Nasiphi Moya 42% to 31%, while Mxolisi Phakathi was ahead of Haniff Hoosen in eThekwini, 38% to 31%.
Ekurhuleni was the most uncertain market, with Khathutshelo Rasilingwane leading on just 26%. Buffalo City was more settled, with Princess Faku on 63%, while Bongani Mathae led in Mangaung with 55%.
How Polymarket Works
Unlike traditional bookmakers, Polymarket does not set odds or take the opposite side of a bet. Instead, users trade contracts with one another through an order book.
A “yes” contract is priced between US$0 and US$1, with the price reflecting the market’s implied probability. A contract trading at 52 cents, for example, suggests a 52% chance of that outcome.
At current exchange rates, US$1 is roughly R17.20, meaning the total trading volume of about US$379,000 across the eight metro markets is approximately R6.5 million.
However, the markets remain relatively small. Johannesburg accounted for around US$135,000 (about R2.3 million) in trading volume, while Cape Town had only US$11,700 (about R201,000).
That raises questions about how easily prices can be influenced.
Bloomberg has previously reported concerns that election prediction markets can be moved by relatively small amounts of money, particularly when trading volumes are low.
Mayoral Outcomes Are Difficult To Predict
There is another complication: South Africans do not directly elect their mayors.
Voters elect ward councillors and political parties, after which the newly constituted council elects a mayor. The first council sitting must take place within 14 days of the election results being declared.
This could make prediction markets particularly difficult to price in metros where no party wins an outright majority. Coalition negotiations could ultimately determine who becomes mayor, regardless of how individual parties perform at the polls.
Polymarket’s Johannesburg market will settle based on the person elected mayor by the city council and can remain open until June 2027.
Calls For Regulation
The growing interest in political prediction markets has also attracted scrutiny from South Africa’s bookmakers.
The South African Bookmakers’ Association (Saba) has argued that platforms such as Polymarket should fall under the country’s gambling laws.
Saba warned that South Africa currently has no system specifically designed to detect manipulation of political prediction markets. It also raised concerns about responsible gambling, self-exclusion, taxation and money flowing to offshore operators.
South African gambling law permits online betting through licensed bookmakers and totalisators, but does not specifically address prediction markets.
With Polymarket not currently listed among its restricted jurisdictions, South African users can access its markets.
The debate now puts the spotlight on a growing question: should prediction markets be treated as financial information tools, gambling platforms, or something entirely different?
With South Africans heading to the polls on 4 November, Polymarket’s mayoral markets will provide another closely watched — but unregulated — measure of expectations around the country’s major cities.
Main Image: IOL
