Kalshi says its markets barely reacted to the fake polling figures
Prakash, who The Guardian revealed to be the operator of the fake polling outfit, does have an account on Kalshi, but a company review of his activity did not find that he placed money on any of the races related to his fabricated polls, according to two people with direct knowledge of his trades who were not authorized to speak publicly. A Polymarket employee, also not authorized to speak publicly, said Prakash does not appear to have an account on Polymarket, which operates a U.S.-based app requiring identity verification and a more popular overseas platform that allows anonymous cryptocurrency-based trading.
In a statement to NPR, Prakash underscored that the gesture had no connection to prediction-market wagering: “No bets or trades were placed on prediction or betting markets related to any of the races for which Median Strategies published polling.” When pressed for more clarity about his motivations, Prakash said, “I am not interested in any further conversation regarding this.” He had earlier described the bogus polls as “a short-term social experiment” to see how quickly fabricated figures would circulate in news stories and on social media, and said he was not trying to profit from the attention.
The fake Median Strategies polls covered the Los Angeles mayor’s race and elections in Wisconsin and Nevada. The Los Angeles Times first reported that the polling numbers were a fabricated stunt, after which multiple media outlets reported on the figures as if they were legitimate. Los Angeles Mayor Karen Bass promoted the fabricated poll across social media because it showed her with a favorable lead in the November election. After the poll was revealed as a sham, the Bass campaign called for criminal penalties against “bad faith attempts to influence elections.”
The Commodity Futures Trading Commission, which regulates prediction markets, and the U.S. Department of Justice did not return requests for comment. The California Attorney General’s Office declined to comment.
The initial speculation that the episode was an effort to manipulate prediction markets reflected broader anxieties about the platforms as Kalshi and Polymarket — where billions of dollars of bets flow in every week on everything from baseball games to administration policy — have moved into the mainstream ahead of the midterms, two months away. “These markets are very easily manipulated, and the platforms say they invest in surveillance and catch people after the fact, but when it comes to elections, the consequences are really grave,” said Amanda Fischer, chief policy officer at Better Markets, a financial reform group that studies prediction markets.
Fischer, a former chief of staff at the Securities and Exchange Commission, said the current cycle would be the first major election in which Kalshi and Polymarket had reached mainstream audiences, and predicted that “some folks will be looking for ways to game prediction markets, partisan interests, and worse, perhaps even foreign actors.”
Prediction-market operators have already caught several high-profile attempts at insider trading this year. These include a special forces soldier who bet on the U.S. operation to capture Venezuelan President Nicolás Maduro, former U.S. Rep. George Santos, who wagered against his own attendance at the State of the Union, and a White House teleprompter operator who profited off President Trump’s prepared remarks.
Some political operatives argue that the platforms rarely produce political forecasts independent of traditional polling. Eddie Vale, a Democratic strategist who worked on Wisconsin Democrat David Crowley’s campaign, pointed to Crowley’s primary win as evidence. Polls during Wisconsin’s gubernatorial primary showed Crowley trailing other candidates by wide margins, and Kalshi similarly projected him as a long-shot — but Crowley won. “It appears that there really aren’t any predictions here, they’re just reacting belatedly to public information, like polls and news stories,” Vale said. “If it was just a fun entertainment tool for political junkies, fine, but to me, all of this is a marketing sheen for an online gambling operation.”
Kalshi disputed that characterization, pointing to its federal regulation by the CFTC as a licensed operator of “event contracts.” On the fake Median Strategies polls, spokesman Jack Such said the episode actually illustrated the markets’ value. “Traders lose money if they act on bad information. While news outlets and campaigns touted the poll as real, the markets barely reacted at all,” Such said.
Kalshi cited a study it conducted of a market related to the Los Angeles mayoral primary in which a trader spent more than $1 million backing Spencer Pratt, a Republican whose online attention drew headlines. That level of trading, the company said, moved market odds for only nine seconds.
Fischer, however, argued that if Kalshi wished to operate as an events-contract company, regulators should enforce the prohibition on trading that is “contrary to the public interest” — a category she said should encompass all election markets. “Betting on elections is clearly prohibited under existing law,” Fischer said. “Goofing around on these markets could impact our democracy, and the consequences are irreversible.”
NPR has previously reported that some campaign staffers have used prediction markets to earn money from access to non-public data about political candidates. Kalshi has barred political staffers from betting on their own races, claiming it has already blocked dozens from attempting to trade on inside information in recent months.
For his part, Vale said the immediate assumption that the fake poll was a pump-and-dump scheme was itself revealing about the current environment. “Everyone’s first inclination being that the fake poll was a pump-and-dump scheme shows how fast false information can move across social media and move prediction markets,” Vale said. “It’s all showing the vulnerabilities in these systems, just as the companies spend lots of money on advertising making the public case that these markets are valid.”