Prediction markets misread LA mayoral race
Speculators wagered over $47 million on Spencer Pratt, yet he finished third, exposing vulnerabilities in how election odds are calculated and perceived.
By Natalia Costa ·
Spencer Pratt entered the June Los Angeles mayoral primary as the heavy favorite on prediction markets, with one platform assigning him a 78% chance of advancing to the runoff. He finished third. The disconnect between the digital odds and the actual vote count has intensified scrutiny over whether these platforms reflect public sentiment or create it.
The Los Angeles mayoral race drew more than $47 million in trades across Kalshi, Polymarket U.S., and Polymarket International, making it the most heavily traded mayoral contest of 2026. Despite the high volume, the markets missed the outcome entirely. Dean Logan, the registrar-recorder for the Los Angeles County Clerk's Office, stated that prediction markets can add to confusion when people treat their projections as more authoritative than actual votes being counted.
Data from the Anti-Corruption Data Collective reveals that price manipulation is a tangible risk. In 167 congressional markets worth more than $100,000, about 23% experienced price spikes of 30 cents or more. These spikes often involved single large trades driving up contract prices temporarily. In one instance, a trader spent $1.25 million on Pratt's victory, pushing the price from 29 cents to 45 cents in seconds before it reverted.
The impact on voter perception is measurable. A September survey by the Brennan Center for Justice found that voters were 10 to 20 percentage points more likely to believe a candidate would win if prediction markets favored them, regardless of polling results. The survey included 1,994 registered voters. This suggests that the visual odds on these platforms carry weight with the public, even when the underlying data is thin.
Liquidity varies significantly across these platforms. ACDC found that 88% of 18,000 active congressional markets could have their prices moved by 10 cents with a single wager under $1,000. This makes low-volume elections particularly vulnerable to distortion. Kalshi responded by adding transparency features in October, including labels for markets with little trading activity and live feeds of individual trades. Polymarket also rolled out a surveillance system to detect manipulation attempts.
Regulatory oversight exists but has limits. Both Kalshi and Polymarket U.S. are governed by the Commodity Futures Trading Commission, which sets rules to prevent market manipulation. While trading prices are public, the identities behind individual trades are not visible to the outside world. Shana Bautista, head of global intelligence at Polymarket, noted that obtaining information on specific transactions typically requires a subpoena or search warrant. The platform partnered with Chainalysis in April to help track suspicious activity on its international site.
Kalshi reports that its markets favored the eventual winner in roughly 90% of U.S. elections since 2024. However, the recent anomalies in the Los Angeles race have prompted questions about the reliability of these tools during high-profile contests. The company uses algorithms to flag unusual trading volumes and price jumps, though it did not clarify if its internal protocols alerted on the specific Pratt trades.
