Fake Streams, Real Money @Spotify has issued a formal directive to prediction market platforms Kalshi and @Polymarket, ordering both to remove its corporate branding and publicly confirm that
@Spotify has issued a formal directive to prediction market platforms Kalshi and @Polymarket, ordering both to remove its corporate branding and publicly confirm that no official partnership exists between them. The move follows a Bloomberg report revealing that traders systematically manipulated Spotify's streaming charts to influence the settlement of music-related prediction markets.
At the centre of the incident is Malcolm Todd's song "Earrings." Spotify spotted and removed over 500,000 artificial streams that had unexpectedly turned the track into one of the most popular songs on its charts.The artificial numbers had already been used to settle a Kalshi market tied to the most frequently streamed Spotify song in the US in June, which had attracted $3 million in trading.
Traders who positioned early, when Todd's probability of topping the chart stood under 3%, potentially realized 30-fold gains.The song was so unlikely to top the chart that it was not even listed as a betting option on Kalshi's competitor, Polymarket. One Kalshi trader, Caleb Davies, flagged the anomaly publicly. He noted that the Sunday-to-Monday streaming change represented "a 11.24 sigma event, or a roughly 1 in 77 octillion chance of happening randomly."
At Spotify's request, Kalshi has removed Spotify's logo from its betting markets and deleted language suggesting Spotify had verified the chart results.Kalshi confirmed it was in contact with Spotify and "actively investigating this matter."Polymarket did not respond to requests for comment.
Kalshi had already paid out Malcolm Todd bettors based on the flawed data. Spotify, for its part, was clear about its own position. "All streaming services face ever-changing stream manipulation," the company said in a statement, adding that it has "best in class detection and mitigation practices" and does not pay out royalties on manipulated streams.The platform also announced it would add additional checks before publishing chart results.
As of the time of reporting, there is no suggestion that Todd or his team was affiliated with the streaming manipulation. The episode highlights a broader structural tension: the notion that the average music listener can now profit on results they have a chance to manipulate only further incentivises the activity.This is not the first integrity concern for Kalshi either, as earlier this year a MrBeast editor was accused of insider trading over the YouTuber's videos on the platform.
Sources:Bloomberg: Spotify Challenges Prediction Markets After Song Chart RiggingThe Hollywood Reporter: Spotify Pulls Streams On a Hit Song Over Alleged Fraud Tied to Kalshi BettingStereogum: Spotify Confirms Streaming Fraud After Kalshi Trader Flags Suspicious Malcolm Todd Numbers
