Prediction markets Polymarket and Kalshi had Flávio Bolsonaro at roughly 80% on Sunday morning. By evening, Luiz Inácio Lula da Silva had won a fourth term, and traders were arguing about what the markets were for.

Brazil’s Superior Electoral Court counted 51.8% of valid votes for Lula against 48.2% for Bolsonaro, CNBC reported. With all votes counted, Lula’s margin was nearly 4.4 million votes, the Associated Press reported. Bolsonaro refused to concede and said he would ask for the result to be annulled, pointing to a Supreme Court justice’s late ruling that kept polls open two extra hours.

Lula had finished second to Bolsonaro in the first round, the first time a first-round runner-up won the runoff since direct elections returned in 1989.

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Two Hours on Kalshi

On Kalshi, Bolsonaro “traded at 80%+ for two days,” Michael McDonough wrote on X, before “Lula went from 20% to 70% and Bolsonaro collapsed to 31%, on the heaviest volume of the market’s life.” Polymarket’s Brazil election market, which drew more than $249 million in total volume, has since resolved in Lula’s favor. Prediction markets are banned in Brazil itself.

Runoff polls had given Bolsonaro only about 51% of the vote, according to a Rio Times tally, a far narrower edge than the markets showed. The outlet also found the order book on Polymarket was thin enough that about $30,000 of selling would have cut five points from Bolsonaro’s price at 5:15 p.m. ET, and that prices moved 30 to 40 minutes ahead of the visible count.

Wrong, or One in Five?

Joe Weisenthal asked whether this was “shaping up to be one of the biggest prediction market whiffs of all time.” Harry Crane replied, “First time a 4-1 shot has ever won in the history of betting?”

Nic Carter, who had noted that the market “was 80/20 Bolso/Lula earlier today,” later asked whether the upset belonged in the category of “normal variance that happens one in every five times.”

Brazilian stocks sold off too, with the U.S.-listed EWZ fund down nearly 20% overnight, per CNBC.

Lula is set to begin his new term on Jan. 5, 2027, according to AP, while Bolsonaro’s challenge to the result is pending.

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