- Caleb Davies, a top Kalshi trader, claims to have earned $1.2 million overall from prediction markets, including $414,000 from Kalshi's culture markets, by analyzing Spotify data.
- Davies suspects bot-fueled manipulation of Spotify-related prediction markets, citing Malcolm Todd's song 'Earrings' surging to number one as a highly improbable event.
- Spotify confirmed investigating and finding evidence of artificial streaming, adjusting charts by removing over 500,000 fake streams, which moved Todd's song from first to fourth.
- Kalshi removed Spotify's logo from its markets and adjusted language at Spotify's request, while investigating the matter, but had already resolved the market based on initial data.
- Polymarket denied involvement, noting it did not list Malcolm Todd as an option, and is reviewing streaming manipulation but has not identified any immediate manipulation.
- The incident highlights new incentives for streaming fraud in prediction markets, with concerns about susceptibility to manipulation raised by regulatory experts.
- Davies has decided to stop trading chart-based markets despite historical gains, citing the manipulation risks.