• Spotify pushed back after 500,000 fake streams influenced a $3-million Kalshi market.
• The incident exposes manipulation risks in prediction markets tied to real-world data.
• Kalshi and Polymarket face scrutiny over branding, data integrity, and market design.

Spotify has demanded that Kalshi and Polymarket remove its branding from their platforms and publicly clarify that neither operates any commercial partnership with the streaming service after discovering that more than 500,000 artificial streams had been used to manipulate a Kalshi betting market that drew $3 million in trading volume.

The incident centers on Malcolm Todd’s song “Earrings,” which topped Spotify’s daily US chart for the first time before the platform discovered the manipulation and removed approximately 500,000 streams.

LATEST: ⚡ Spotify asked Kalshi and Polymarket to remove its logo after traders gamed 500K streams to win a $3M prediction market, per Bloomberg. pic.twitter.com/T2iwsmfbkt

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The artificial figures had already been used to settle a Kalshi market on June’s most streamed Spotify song in the United States before Spotify completed its fraud investigation. Kalshi had already paid out bettors based on those inflated numbers by the time the manipulation was confirmed.

A structural incentive problem

The mechanics of what happened are straightforward, and that is what makes the episode genuinely alarming for the prediction market industry. Kalshi currently lists dozens of contracts tied to Spotify and Billboard chart results. Kalshi chief operating officer and co-founder Luana Lopes Lara told Billboard in late April that trading on the platform’s music contracts had already topped $400 million in 2026.

That scale creates a direct and computable financial incentive to game the underlying data. Kalshi’s odds of Todd finishing with June’s top song sat below 3% before the suspicious streaming began, meaning traders who bought in at those prices stood to earn roughly 30 times their stakes. At those returns, purchasing artificial streams in bulk becomes a straightforward cost-benefit calculation, with the potential winnings dwarfing what fake plays cost to generate.

Spotify said in a statement that all streaming services face ever-changing stream manipulation and that it has best-in-class detection and mitigation practices, adding that it does not pay out royalties associated with manipulated streams.

The platform also told The Hollywood Reporter it would add additional checks to charts before they are published, an acknowledgment that its existing detection did not catch the manipulation quickly enough to prevent it from destabilizing a financial market.

Traders criticize Kalshi’s response

The incident has also exposed a dispute over how Kalshi handled the situation once suspicious activity was flagged internally.

Caleb Davies, one of the more prominent traders betting on music charts, publicly criticized Kalshi after first calling out the suspicious activity. He argued the platform pointed at Polymarket and reached for plausible deniability rather than confronting the issue and protecting traders. Davies said the manipulation caused him losses of $4,500.

Spotify has asked prediction market operators Kalshi and Polymarket to remove its logo and clarify that neither company is affiliated with the streaming platform after detecting manipulation tied to music-chart betting, according to Bloomberg. Spotify said it identified and…

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A Kalshi spokesperson said the platform is in touch with Spotify and actively investigating the matter. Polymarket had not issued a public statement at the time of publication. Neither platform has explained why Spotify’s logo appeared on their sites without a commercial agreement in place, the detail that appeared to most directly irritate the streaming company.

A pattern that goes beyond music

The case sharpens concerns that prediction markets are handing bettors an incentive to manipulate the underlying events they wager on. A US think tank employee was previously found to have edited an interactive map of the Russia-Ukraine war that underpinned a Polymarket bet on Russian territorial gains, and French authorities have investigated whether someone tampered with weather-station data to profit from a market on Paris temperatures.

Each of these incidents follows the same template. Prediction markets work by settling against real-world data, and any data that can be influenced by a motivated actor with a large enough financial position becomes a potential attack surface. The more liquid and high-profile the market, the larger the incentive to manipulate whatever sits underneath it.

For Kalshi, which is regulated by the US Commodity Futures Trading Commission and has been actively embedding itself into mainstream media through partnerships with CNN, CNBC, and Fox News, the episode lands at an awkward moment.

The platform has been arguing for broader regulatory legitimacy and expanded event coverage precisely as evidence accumulates that the underlying data sources its markets rely on are not built to withstand direct financial pressure from bettors with skin in the game.