Spotify NYSE:SPOT has moved to push back against Kalshi and Polymarket after discovering artificial streaming activity linked to prediction market bets on its music charts. The company asked both platforms to remove Spotify's logo and clarify that neither firm has a partnership with the streaming service. Spotify identified and removed more than 500,000 artificial streams that had unexpectedly lifted Malcolm Todd's song Earrings into one of the most popular tracks on its charts.
The issue had already been used to settle a Kalshi market tied to the most-streamed Spotify song in the US in June, which attracted $3 million in trading. Todd had been declared one of the winners based on figures published before Spotify completed its investigation. Kalshi said it is in touch with Spotify and actively investigating the matter, while Polymarket did not immediately respond to a request for comment.
The situation could intensify investor scrutiny around prediction markets, where financial incentives may possibly encourage traders to manipulate the underlying data behind contracts. Before the suspicious streaming activity, Kalshi's odds of Todd finishing with June's top song were below 3%, meaning traders who bought contracts at those levels likely earned roughly 30 times their initial stakes. One prominent music-chart trader, Caleb Davies, said he lost $4,500 after the suspicious streams pushed Todd into the lead.