According to recent reporting, the prediction market Kalshi sought to clean up apparent messes on Friday after some of its influencer relationships essentially made it look like it was paying to distribute conspiracy content online. Posts have now been removed at Kalshi's request. However, similar sponsored posts associated with Kalshi's competitor, Polymarket, do not appear to be disappearing.

The news event that triggered the issue was the Los Angeles mayoral election. In California politics, there's this concept known to locals as the red mirage, in which Republicans tend to look dominant on election nights—as if our deep blue state is finally having the change of heart much of America apparently fantasizes about.

Republicans very much did look dominant on election night, owing to the fact that Republicans' voting patterns tend to get their votes counted first. But it's been a few days since the primary on June 2, and Republicans' hopes for their preferred outcomes are slowly fading. That's making people suspicious. And some of those people have branding relationships with the big prediction markets.

For instance, right-wing influencer Kangmin Lee posted an embed of a Polymarket post on X, and wrote “Notice how the mail-in ballots that come in last second always end up voting Democrat,” adding, “Totally a coincidence, nothing to see here.” At the bottom of that post it says “Paid partnership.” Another similar sponsored post came from right-wing commentator Benny Johnson, who said: “The public has so little faith in California's elections that they just assume Democrats are going to dramatically rig it with questionable ballot counting DAYS after Election Day.”

Johnson is wisely hedging by attributing the conspiracy theorizing to others, and he's also not entirely wrong about the public's attitude toward elections in California. It's common to have to wait weeks for election results here in California, which leads to this horrible phenomenon where you painstakingly figure out how you want to vote on dozens of issues, lose track of who or what you voted for, and then when the results come in—perhaps sometime the following month—you don't care anymore. There's no convincing reason it should be this way, and everyone I know hates it.

But crucially, it doesn't seem (so far) to have been the result of anyone tampering with the votes. It would appear that, bit by bit, the election night lock conservative mayoral candidate and ex-reality TV villain Spencer Pratt had on second place is loosening, and he may soon be overtaken completely by Nithya Raman, a progressive—not because the votes are changing, but because they're being counted in slow motion. For unrelated reasons, only the first- and second-place candidates make it to the ballot in November.

As of this writing, the latest vote tally shows Pratt with 28.2% of votes, and Raman with 24.9%. Nonetheless, over on Polymarket, Raman's odds of advancing to the second round of voting are now at 95%, and Pratt's are at 6%. That's life in a deep blue city (Spencer Pratt says he will leave LA if he doesn't become mayor, by the way).

Now, according to Semafor, Kalshi has requested that paid influencers remove posts “that sowed doubt about the integrity of the Los Angeles mayoral election.” Semafor says one such post, which has since been deleted, was from the account “Gunther Eagleman,” which belongs to a right-wing influencer named David J. Freeman, who has 1.7 million followers. Freeman wrote, “Is CA cheating to get Spencer Pratt out?” and embedded a Kalshi post, according to Semafor. One approving quote of that post—which is now broken—said, “Yes they are cheating.” Another since-deleted X post from right-wing influencer Matt Van Swol read (again, according to Semafor) “I need someone to explain to me how EVERY SINGLE VOTE that comes in ‘late’ to California …nearly 100% of them…Go to ANYONE but Spencer Pratt.”

One can only assume that, upon seeing that these sponsored posts have been removed, conspiracy theorists are surely packing up their yarn walls and finding more productive ways to spend their time. Semafor says Kalshi and Polymarket fund “hundreds” of influencers. In a report on Friday, Politico found that, according to transaction records it had reviewed, an executive at Polymarket sent at least $350,000 to influencers via a personal PayPal account throughout last year and in January of this year.

Regarding the now-deleted posts, Kalshi spokesperson Dani Lever told Semafor it had “asked these to be taken down, as they violate our affiliate marketing policies.” Polymarket did not get back to Semafor. Gizmodo also reached out to Polymarket for clarity about its policy regarding these sponsorships or any statement at all about the posts. We will update this article if we hear back.

What Are Prediction Markets?

Prediction markets are platforms where users can bet on the outcomes of future events, such as elections, sports, or even weather. They function similarly to stock exchanges, with prices fluctuating based on the perceived probability of an event occurring. For years, these markets have operated in a legal gray area in the United States, but a recent Commodity Futures Trading Commission (CFTC) ruling has allowed platforms like Kalshi to offer event contracts on certain topics. Polymarket, on the other hand, operates using cryptocurrency and often off-chain resolution, which places it under less direct U.S. regulatory oversight.

Kalshi was founded in 2018 by Luana Lopes Lara and Tarek Mansour, both former traders. The platform has sought to legitimize prediction markets by complying with U.S. regulations, and it offers betting on political, economic, and cultural events. In contrast, Polymarket was founded in 2020 by Shayne Coplan, and it quickly became the largest decentralized prediction market, with millions of dollars in volume during the 2024 U.S. elections. Both platforms have aggressively courted influencers to promote their markets, often paying for posts that are clearly marked as advertisements.

The Red Mirage Phenomenon

California's election reporting system is notoriously slow. The state allows all registered voters to receive mail-in ballots automatically, and ballots can be postmarked on election day and still be counted if received within days. This means that in-person votes, which tend to lean Republican in many contests, are tabulated first. As a result, early returns often show Republican candidates leading even in heavily Democratic areas. This is not evidence of fraud; it is a structural feature of the system.

The term “red mirage” gained prominence after the 2020 presidential election, when former President Donald Trump prematurely declared victory based on early returns in states like Pennsylvania and Michigan. Those leads evaporated as mail-in ballots, which were heavily Democratic due to the pandemic, were counted. The same pattern has repeated in California countless times, but it still generates suspicion among those unfamiliar with the process.

The Los Angeles mayoral primary is a nonpartisan contest, but candidates often have clear party affiliations. Spencer Pratt, a former reality TV star from “The Hills,” ran as a conservative Republican, emphasizing law and order and promising to crack down on homelessness. Nithya Raman, a city council member, is a progressive Democrat who advocates for housing-first policies and police reform. Raman is widely favored to win the general election in November if she secures the second spot in the runoff.

The Role of Influencers

The relationship between prediction markets and influencers is symbiotic. Markets push affiliates to drive betting volume, and influencers are paid per post or per sign-up. For example, platforms pay creators a commission on the revenue generated by users who click on their unique links. This model encourages influencers to create content that generates excitement or controversy, and scandals can be lucrative for both parties.

However, the line between authentic opinion and paid promotion can blur. Sponsored posts that cast doubt on election integrity may be technically permissible as advertising, but they can also damage public trust. Kalshi's decision to remove the posts indicates a recognition that such content is not worth the reputational risk. Polymarket's silence may reflect a different risk tolerance or a belief that its decentralized nature insulates it from accountability.

The growth of prediction markets has also attracted attention from lawmakers and regulators. Some argue that they provide valuable information aggregation and can be used for hedging purposes. Others worry that they incentivize misinformation and that easily manipulated markets could be used to spread false narratives.

Broader Implications

The LA election controversy is a microcosm of larger debates about money in politics, algorithmic amplification, and the erosion of trust in institutions. When paid influencers post unsubstantiated claims, they are not merely expressing personal opinions; they are leveraging a financial relationship to push a narrative. Even if the posts are marked as partnerships, the average viewer may not distinguish between a sponsored conspiracy theory and an organic one.

Furthermore, prediction markets are not neutral observers; they have a financial stake in the outcomes they facilitate. High volatility in betting odds can generate more volume and more fees. Therefore, platforms have an incentive to keep markets active and talked about, even if that means allowing or encouraging conspiracy content. Kalshi's move to take down posts might set a precedent for self-regulation, but it remains to be seen whether Polymarket will follow suit.

As the United States heads into a contentious midterm cycle in 2026, the role of prediction markets will likely come under increased scrutiny. Regulatory clarity is needed to ensure that these platforms do not become vehicles for disseminating false information. In the meantime, the public should be wary of any content that is paid for by entities with a vested interest in the outcome of an election. The LA mayoral race continues to be a test case for how prediction markets and their affiliates interact with the democratic process.

Source:Gizmodo News