Erin Hooley/Associated Press
Earlier this month, after news broke that a phony company had released fake election polls, it prompted immediate speculation that the stunt was an attempt to manipulate prediction markets — fears especially pronounced with midterms right around the corner.
The 21-year old man behind the fake polls posted a statement saying the bogus polls were “a short-term social experiment” to see just how fast the fabricated figures would circulate in news stories and social media. He said he was not trying to profit off the attention the polls attracted.
But the suspicion was understandable, considering the spate of high-profile market manipulators uncovered in recent months on the surging prediction market sites Kalshi and Polymarket, where billions of dollars of bets flow in every week on everything from baseball games to the future of the Trump administration’s policies.
While the poll stunt may not have been an effort to rig prediction markets, concerns are growing ahead of the midterms two months away about other attempts to influence the betting sites with ginned-up polls, viral social media campaigns, or other misinformation.
“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 added that since this is about to be the first major election cycle with Kalshi and Polymarket having gone mainstream, “some folks will be looking for ways to game prediction markets, partisan interests, and worse, perhaps even foreign actors.”
Kalshi and Polymarket didn’t find trades from fake poll creator
This year, prediction market operators have caught traders trying to make a buck through various types of insider trading, from a special forces soldier betting on the operation to capture Venezuelan president Nicolás Maduro to former Congressman George Santos betting against his own attendance at the State of the Union address to President Trump’s teleprompter operator profiting off the president’s prepared remarks.
Yet it does not appear, at least so far, that the fictional election polls published this month under the name Median Strategies had that goal.
Rahil Prakash, who The Guardian revealed to be the man behind the fake polling outfit, does have an account on Kalshi. But when the company dug into his activity, it did not find that he put money down 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 source close to Polymarket who was not authorized to speak publicly said Prakash does not appear to have an account on Polymarket U.S. app, which requires users verify their identity. Officials at the company are still looking into any possible activity on its more popular platform overseas that allows users to trade anonymously with cryptocurrency.
Martin Lelievre/AFP via Getty Images
Prakash’s made-up company, Median Strategies, released polls focused on the Los Angeles mayor’s race and elections in Wisconsin and Nevada. In a statement to NPR, the 21-year-old 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,” Prakash said.
When pressed for more clarity about his true motivations, Prakash said, “I am not interested in any further conversation regarding this.”
The fake Los Angeles poll caused a stir in California political circles after The Los Angeles Times first revealed that the polling numbers were some kind of mischievous caper. Multiple media organizations reported on figures as if they were legitimate and Los Angeles Mayor Karen Bass boosted the fake poll across social media, since it gave her a favorable leg-up in the November election.
After the poll was revealed to be a sham, the Bass campaign called for “bad faith attempts to influence elections” to be criminally prosecuted.
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.
Political operative says the sites are not really predictive
Beyond fears about bad actors attempting to distort the markets for profit, some political operatives say the sites rarely deliver political forecasts that are different from traditional polling.
For instance, polls during Wisconsin’s gubernatorial primary showed Democrat David Crowley lagging other candidates by wide margins. Kalshi similarly projected Crowley as a long-shot candidate — but Crowley landed a surprise win.
“It appears that there really aren’t any predictions here, they’re just reacting belatedly to public information, like polls and news stories,” said Eddie Vale, a Democratic strategist in Washington who worked on Crowley’s campaign. “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 disputes this, pointing to how it is licensed and federally regulated by the CFTC as an operator of a type of trading known as “event contracts.”
And on the bogus polls, Kalshi said they were actually a test of just how responsive its markets are to real information.
“Fake polling is a poignant example of why election markets are so important: they’re a filter for misinformation,” said Kalshi spokesman Jack Such. “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.”
Kalshi highlighted a study it did of a market related to the Los Angeles mayoral primary in which a trader pumped more than a million dollars into Spencer Pratt, the Republican who drew online attention for brash style of campaigning. That amount of money, the company said, only moved market odds for nine seconds.
Fischer, a former chief of staff at the Securities and Exchange Commission, said if Kalshi wants to own its status as an “events contract” company, regulators should be enforcing all of its rules, including that trading is banned when a market is “contrary to the public interest. She argues all election markets should fall in this category.
“Betting on elections is clearly prohibited under existing law,” she said. “Goofing around on these markets could impact our democracy, and the consequences are irreversible.”
NPR has reported that some campaign staffers have turned to prediction markets to earn money from access to non-public data they possess about political candidates. Kalshi has barred political staffers from betting on their own races, claiming it has already blocked dozens from trying to trade with inside information in recent months.
Episodes like the fake Median Strategies polls make some people believe that any attempt to inject false information into the world is potentially a prediction market tactic, Vale said.
“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,” he 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.”
