Spotify asks Kalshi, Polymarket to remove branding after manipulated streams used to settle music bets: Bloomberg

Spotify has asked prediction markets Kalshi and Polymarket to remove its logo and make clear that neither operates a partnership with the streaming service, after discovering manipulated streaming activity that affected song rankings used to settle prediction market bets.The company removed more th…

The company removed more than 500,000 artificial streams that had pushed Malcolm Todd's "Earrings" into one of the most popular songs on its charts, Bloomberg reported Thursday.

Those inflated numbers had already been used to settle a Kalshi market pegged to the most-streamed Spotify song in the U.S. in June, which attracted $3 million in trading.

Todd was declared one of the winners on figures published before Spotify finished its investigation, according to the report. Spotify contacted both companies after identifying the problem.

Kalshi is reportedly investigating the matter. Polymarket did not immediately respond to Bloomberg. The Block has contacted the firms for comment.

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, according to Bloomberg.

Manipulation

The case sharpens concerns that prediction markets are handing bettors an incentive to manipulate the underlying events they wager on.

A U.S. 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.

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.

Artificial streaming is a long-running problem for Spotify and its rivals, typically deployed to inflate artist earnings. Prediction markets add a fresh financial motive to game the numbers.

"All streaming services face ever-changing stream manipulation," a Spotify spokesperson told Bloomberg, adding that the company runs detection and mitigation practices for manipulated streams and does not pay royalties on them.

The news was first reported by WIRED.

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