Fraudulent Streams Removed by Spotify Amid Kalshi Bets Concerns

In an era where betting spans sports, politics, and even reality television, the idea of manipulating music streaming numbers for profit seems plausible. This week, Spotify took action after discovering over 500,000 fraudulent streams for Malcolm Todd’s track “Earrings,” which had briefly soared to the top of the U.S. daily chart.

Caleb Davies, a well-known trader in the prediction market who has earned upwards of $1 million on platforms like Kalshi and Polymarket, quickly identified the unusual surge in streams as suspicious.

“Malcolm Todd achieved first place in what appears to be outright fraud, with a 70% increase in U.S. streams in just one day,” Davies stated on X this past Tuesday.

On July 1, he shared, “Analyzing the data from Sunday to Monday, it was an 11.24 sigma event, roughly equivalent to a 1 in 77 octillion chance of occurring randomly.”

Following this, Spotify eliminated the fraudulent streams, which are defined as those not representing actual user engagement but rather artificially inflated through bots or scripts. After the adjustments, Todd’s track fell to the fourth position on the charts, as reported by Wired.

“All streaming platforms contend with ongoing challenges related to stream manipulation,” a Spotify representative informed Gizmodo via email. “Spotify employs industry-leading detection and prevention measures for manipulated streams, and we do not compensate for associated royalties.”

Spotify has yet to confirm any link between the fraudulent streams and prediction market betting. There is also no conclusive evidence that traders on Kalshi were responsible for the artificial increase.

Nevertheless, by the time Spotify revised its streaming figures, Kalshi had already distributed payouts on bets concerning which artists would hit No. 1 in the U.S. during June.

Davies relayed to Wired that when he reached out to Kalshi regarding his worries, Robert DeNault, the company’s enforcement director, stated that only Spotify could verify if bots were utilized and suggested that Kalshi traders might have been merely imitating actions taken by traders on Polymarket.

Davies argued that this theory was implausible since Todd was not listed as an option on Polymarket’s Spotify market for that chart.

In light of the incident, Spotify has requested both Kalshi and Polymarket to remove their logos from their platforms and eliminate any language that implies a partnership. A Kalshi spokesperson told Gizmodo on Friday, “We are in communication with Spotify and are actively investigating this issue.”

This situation arises as prediction market platforms like Kalshi and Polymarket face increased scrutiny following notable incidents of users making significant profits through trades linked to global events.

Some lawmakers have proposed legislation aimed at prohibiting trades on these platforms that relate to outcomes susceptible to manipulation.

The proposed bill, known as the Banning Event Trading on Sensitive Operations and Federal Functions Act, or BETS OFF Act, seeks to outlaw several categories of bets on prediction market platforms, including wagers concerning “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.”

“What we have discovered is that within this administration, certain individuals in the White House are profiting from the U.S. entering or avoiding war,” stated Senator Murphy in a video shared on X in March.

Apart from prohibiting bets that might incentivize government officials to advocate for specific outcomes, the bill also addresses wagers on events where insiders could have prior knowledge or control over the outcome. This could encompass bets on Super Bowl halftime performances, Oscar winners, and even victors of reality television competitions like Survivor.

The legislation challenges one of the fundamental attractions of prediction markets. While both Kalshi and Polymarket prohibit insider trading, they also encourage the concept that “experts” can leverage their insights to make better-informed bets, enhancing the accuracy of the market.