WASHINGTON / LOS ANGELES — October 31, 2026
A high-stakes investigation into America’s booming election prediction markets has exposed how relatively small transactions can produce dramatic changes in candidates’ perceived chances of winning—raising new concerns about market manipulation, voter confidence and the future of election betting.
An October 30 CNBC investigation found that millions of dollars poured into contracts tied to the 2026 Los Angeles mayoral primary, where former reality television personality Spencer Pratt emerged as a strong favorite on some prediction platforms.
At one point, a market assigned Pratt a 78% probability of advancing to the November runoff.
But when voters actually cast their ballots, he finished third.
The result exposed a significant gap between speculative market prices and electoral reality.
More troublingly, research conducted for CNBC by the Anti-Corruption Data Collective (ACDC) identified unusual price movements across numerous election contracts.
The organization found that 38 of 167 qualifying congressional markets—approximately 23%—experienced price spikes of at least 30 cents.
Another analysis involving 18,000 active congressional markets showed that 88% could experience a 10-cent price movement from a single trade worth less than $1,000.
These findings raise an uncomfortable question about an industry increasingly promoted as a way to forecast political events.
If a relatively small group of traders can temporarily make a candidate appear significantly more likely to win, could prediction markets become tools for shaping public perceptions rather than simply forecasting election outcomes?
Spencer Pratt’s Los Angeles Election Becomes a Warning Sign
The June 2026 Los Angeles mayoral primary attracted extraordinary trading activity.
More than $47 million in contracts changed hands across markets associated with the race, according to CNBC.
Pratt, a former reality television personality who entered politics after losing his home in the Palisades fire, became a prominent candidate.
Prediction markets suggested he had a strong chance of reaching the runoff.
However, he ultimately finished third.
This was not proof that the election had been manipulated.
It was evidence that the trading market’s expectations differed sharply from the result.
Los Angeles County Registrar-Recorder Dean Logan warned that market predictions could create confusion if people treated them as more authoritative than official vote counts.
That is the central danger identified by the investigation.
A candidate’s market price reflects the behavior of traders, not a certified election result or a representative survey of voters.
A $1.25-Million Trade Temporarily Pushes Pratt’s Odds Higher
CNBC’s investigation highlighted a striking transaction on May 20.
According to a Kalshi case study, a trader spent approximately $1.25 million purchasing contracts favoring Pratt’s victory.
One transaction pushed the price of the relevant contracts from 29 cents to 45 cents.
That temporarily made the market appear to assign Pratt a 45% chance of victory rather than 29%.
Kalshi reported that the price returned near its earlier level within nine seconds.
Its head of enforcement, Robert DeNault, argued that traders willing to take the opposite position could quickly correct prices that moved too far.
But ACDC’s analysis revealed another detail.
Looking beyond the immediate reaction, researchers found that the contract price remained several cents higher for approximately two hours during the broader three-hour period they examined.
That suggests that even short-lived trading shocks may have consequences for how market prices are interpreted.
However, the transaction’s size and timing do not establish that its buyer intended to mislead voters.
The trader’s motive has not been conclusively determined.
How $8,000 Could Make a Senate Candidate Appear Almost Certain to Win
Another example involved the Illinois Democratic Senate primary.
On March 3, ACDC identified unusually large trades involving contracts on Juliana Stratton.
One purchase worth approximately $5,000 pushed her contract price from 47 cents to 79 cents.
The price quickly returned to 47 cents.
But approximately a minute later, another $3,000 in purchases drove the price as high as 99 cents.
The price eventually settled at around 52 cents.
The transactions created a dramatic short-term change in the candidate’s apparent probability of winning.
Yet Stratton subsequently won the primary.
Her spokesperson pointed CNBC toward public polling released on the same day showing her ahead.
This example is important because unusual trading does not automatically indicate a fraudulent strategy.
The traders could have been reacting to legitimate information, making speculative bets or pursuing another objective.
The data demonstrate how prices can move sharply.
They do not conclusively establish why particular traders acted.
Researchers Find 88% of Election Markets Vulnerable to Small Trades
The ACDC findings suggest that market depth is an important issue.
The organization examined 18,000 active congressional markets across Kalshi, Polymarket International and Polymarket US.
It concluded that 88% could experience a 10-cent price movement through a single trade worth less than $1,000.
The problem becomes particularly serious in markets attracting relatively little trading activity.
In a highly liquid market, many competing orders may limit the effect of one participant.
In a thinly traded market, a comparatively small order may move prices substantially.
This means the apparent probability shown on an election contract can be sensitive to how many traders are participating and how many contracts are available at different prices.
A candidate shown as having an 80% chance of victory is not necessarily supported by 80% of voters.
It means that contracts linked to that outcome were trading at prices commonly interpreted as implying that probability.
Those prices can change quickly and are not a substitute for scientific polling.
A New Study Finds Betting Odds Can Influence Voters’ Expectations
The issue extends beyond financial markets.
A study funded by the Brennan Center for Justice and released on October 20 examined whether prediction-market prices influence how people judge political candidates.
Researchers surveyed 1,994 registered US voters on September 21.
Participants reviewed hypothetical congressional races with information about candidates, polling figures and prediction-market probabilities.
The study found that respondents were 10 to 20 percentage points more likely to believe a candidate would win when market odds favored that candidate, depending on the scenario.
Crucially, the experiment measured expectations about who would win.
It did not demonstrate that respondents changed their voting intentions or that prediction markets altered actual election results.
Still, the findings indicate that market prices can influence perceptions, even among people who question their accuracy.
That creates a challenge when prediction-market odds appear alongside traditional polls in television coverage and online news reports.
Election Betting Is Booming Ahead of November 3 Midterms
Prediction markets have become increasingly prominent ahead of the US midterm elections on November 3.
Platforms such as Kalshi and Polymarket allow participants to buy and sell contracts tied to future events.
Election contracts may concern individual candidates, party control of Congress or other political outcomes.
Supporters argue that financial incentives encourage traders to incorporate useful information into market prices.
Critics argue that these prices can be distorted by speculative activity, unequal access to information and concentrated trading.
A Council on Foreign Relations report published in October estimated that more than $1.4 billion had already been staked on contracts tied to the 2026 US midterms.
The report also warned that better oversight would be needed to address insider-trading risks.
For investors and political observers, the key is understanding that betting volume alone is not proof of forecasting accuracy.
A market can be heavily traded and still produce a wrong prediction.
Wall Street Is Watching the Midterms, Too
The November elections are important not only to political prediction markets but also to conventional financial investors.
Congressional control can influence expectations for taxation, spending, healthcare regulation, energy policy and technology oversight.
WWC ONE MEDIA previously examined these implications in JPMorgan Maps the Stocks That Could Win After the Midterms — But Gridlock May Be Wall Street’s Favorite Outcome.
That analysis considered how markets might respond to different congressional outcomes.
However, conventional investment research and election-event contracts are distinct products.
Investment strategists may examine economic consequences under alternative political scenarios.
Prediction-market traders take positions on whether particular outcomes will occur.
Neither approach can guarantee an election result.
Are Prediction Markets More Reliable Than Polls?
Supporters of prediction markets point to their historical forecasting record.
Kalshi says that, across US elections since 2024, candidates favored by its markets won approximately nine times out of ten.
Separately, a Washington Post analysis cited by CNBC examined 268 candidates who received market probabilities between 70% and 80% during this year’s primaries.
Approximately three-quarters ultimately won.
These figures suggest that prediction markets can contain useful forecasting information.
But their performance depends on the races examined, the timing of observations and how probabilities are evaluated.
A market assigning a candidate a 75% chance does not predict certainty.
Even a well-calibrated forecast should sometimes be wrong.
The more serious issue is whether traders can move prices enough to mislead audiences into believing a particular candidate has greater support than the available evidence justifies.
Suspicious Trading Does Not Automatically Mean Insider Trading
Recent international cases demonstrate why investigators are scrutinizing unusual activity.
Reuters reported on October 29 that Polymarket was examining suspicious trades linked to Israel’s parliamentary election.
Blockchain analytics companies identified newly funded accounts that placed profitable bets around the election.
Some accounts reportedly realized substantial gains after the results became clearer.
However, investigators have cautioned that unusual trading patterns can reflect several possibilities.
These include privileged information, independent research, aggressive speculation or chance.
An unusual transaction is evidence worth examining.
It is not, by itself, proof that a crime occurred.
For election markets, this distinction matters because public accusations can damage reputations without establishing responsibility.
Kalshi and Polymarket Introduce Stronger Monitoring
The leading platforms say they are taking steps to address market-integrity concerns.
Kalshi has introduced features to help users recognize low-liquidity contracts and examine trading activity.
Its surveillance systems monitor potentially unusual transactions, including large orders and rapid price changes.
Polymarket has also introduced election-specific surveillance measures.
Its international operation works with blockchain analytics company Chainalysis to examine suspicious on-chain activity.
These systems may help investigators identify accounts involved in unusual trading.
But public observers generally cannot determine the identities behind individual transactions.
The effectiveness of surveillance depends on the quality of the data, investigative procedures and cooperation with relevant authorities.
Regulators and States Disagree Over Who Should Control Election Betting
Prediction markets face a complicated regulatory environment in the United States.
Kalshi and Polymarket US operate under federal Commodity Futures Trading Commission oversight.
The platforms argue that their event contracts fall within the federal derivatives framework.
Several states maintain that particular contracts constitute gambling or otherwise violate state laws.
The resulting disputes have reached federal courts.
New Jersey and other states have sought Supreme Court consideration of the limits of federal authority.
Meanwhile, Maryland election administrator Jared DeMarinis has called for stronger restrictions on betting tied to elections.
His concerns include the possibility that election workers or other individuals with access to nonpublic information could trade before official results become available.
That issue is separate from the manipulation concerns highlighted by CNBC, but it illustrates why election markets are attracting scrutiny from multiple directions.
Public Opposition to Election Betting Is Growing
Public attitudes also present challenges for the industry.
A Reuters/Ipsos survey published October 12 found that a majority of Americans opposed betting on elections and certain government decisions.
The Brennan Center-funded study found that more than 80% of surveyed respondents favored stronger regulation or some form of prohibition.
These findings do not establish a single national consensus on every possible prediction-market product.
But they indicate concern about allowing financial speculation to become part of the election-information environment.
For the platforms, the challenge is demonstrating that market prices can provide useful information without misleading voters or undermining trust in election results.
The Philippines Faces a Similar Challenge With Election Misinformation
The specific legal framework for US prediction markets does not apply automatically to Philippine elections.
Nevertheless, the wider issue of misleading election information is relevant to Filipino audiences.
WWC ONE MEDIA previously reported on COMELEC Exposes Fake BSKE Election Date — The Viral Post That Could Mislead Filipino Voters.
That story examined false social media posts concerning the schedule of barangay and Sangguniang Kabataan elections.
The circumstances are different from election prediction markets.
But both illustrate why voters should distinguish official election information from claims circulating through other platforms.
A market probability, viral graphic or political prediction cannot replace certified election results.
The Bigger Question: Could Speculation Undermine Confidence in Democracy?
Prediction markets create an unusual interaction between finance and politics.
Unlike ordinary financial markets, election contracts concern democratic outcomes determined by voters.
A trader may believe a candidate will win.
Another may place a large trade supporting that candidate’s odds.
Observers may then see the higher price and interpret it as evidence that the candidate is gaining momentum.
If those observations influence public expectations, market activity can become part of the political information environment.
That does not prove votes were changed.
But it explains why election officials, regulators and researchers are examining the risks.
WWC ONE MEDIA previously discussed broader concerns about democratic institutions in US Democracy Hits a 50-Year Low — And the Global Consequences Could Be Bigger Than Anyone Expected.
The report addressed weaknesses in democratic accountability and institutional confidence.
The prediction-market controversy raises a related question about whether financial trading should play an increasingly prominent role in how citizens assess elections.
What Happens Next?
With the November 3 midterms approaching, trading activity could increase further.
Kalshi and Polymarket will face additional scrutiny as their markets receive wider attention.
Investigators may continue reviewing unusual trades.
Courts may also consider whether federal or state authorities have jurisdiction over particular election contracts.
But no outcome should be assumed.
Unusual price movements do not establish an organized effort to influence voting.
And a prediction-market forecast that proves wrong does not mean the underlying election was fraudulent.
The decisive measure of an election remains the lawful counting and certification of votes.
The Bottom Line
CNBC’s October 30 investigation found evidence that significant price swings can occur in election prediction markets, sometimes through relatively small transactions.
Los Angeles mayoral contracts attracted more than $47 million in trading, yet market expectations favoring Spencer Pratt proved wrong when he finished third.
ACDC identified major price spikes across 23% of a sample of qualifying congressional markets and found that 88% of a broader market sample could be moved substantially by individual trades under $1,000.
A separate Brennan Center-funded study found that prediction-market odds can influence voters’ perceptions of who is likely to win.
However, neither study proves that the observed trading changed election outcomes or that specific participants committed market manipulation.
As billions of dollars flow into contracts tied to America’s elections, the defining question is no longer whether prediction markets can forecast political victories. It is whether their prices can be trusted as independent signals of public expectations—or whether financial speculation could increasingly shape the political reality voters believe they are seeing.
