Betting markets have various limits that protect them from being gambling sites, and you literally cannot buy any more contracts on Biden on the ones that show a 10% chance for Trump. That keeps the odds from moving. If the market was liquid, that 10% would surely fall.

Disclaimer: this was explained to me by someone that plays the betting markets, and it could all be wrong.

That quirk is true on PredictIt, but currently on Betfair there is a very liquid market with millions of dollars on both sides where the implied odds are roughly 95% for Biden and 5% for Trump.

Now, betting markets do have the problem where even if the bet was a "sure thing", it might not be worth betting for a ~5% gain when you account for the risk and effort related to getting the money into and out of the betting market, and I think that partially explains why the market has settled where it is. But still, this highly liquid market had Trump a pretty strong favorite on election night as well.

This isn't true. There are some very liquid markets that still have Biden at ~85%

Can easily get 5-6 figures down on Polymarket (been adding to my position all week)

https://polymarket.com/market/will-donald-trump-be-inaugurat...

I am aware of caps on the amount of money an individual can risk in prediction markets, but not a cap on the total number of positions.

Where might one find such a market that presently shows a 10% Trump chance? It would be interesting to see what the trading volume looks like.

Here is one: https://www.predictit.org/markets/detail/3698

Yes but you can't purchase that contract. PredictIt is not a free market betting platform with a bunch of restrictions (e.g. $850 limit per contract per person, 5000 bettor limit per contract, 10% vig on winnings, 5% vig on all cash withdrawn).

That being said, I've told friends to make free 5% after all those fees (before tax) and a bunch have made some beer money by betting on PA and a few other states.