Brazil’s runoff count exposed a sharp prediction-market misfire

Luiz Inácio Lula da Silva retained Brazil’s presidency after overturning Flávio Bolsonaro’s first-round lead, delivering a result that left prediction markets badly out of step with the final vote. With the count complete, Brazil’s electoral court put Lula at 51.8%, nearly 4.4 million votes ahead of Bolsonaro.

The reversal came during the Oct. 25 runoff count. Polymarket had put Bolsonaro’s chance of victory at 80% at noon, but its odds shifted to Lula after results began to be published at 6 p.m. A Kalshi snapshot during the live count priced Lula at 78% and Bolsonaro at 24%; the figures were contract prices, rather than vote shares, so they did not need to add to 100%.

As we reported Oct. 17, right-wing figures had embraced Polymarket’s runoff odds amid distrust of opinion polls. Bolsonaro had become the market favorite after finishing first in the Oct. 4 first round, taking 47.03% to Lula’s 45.16%, a gap of 1.87 percentage points.

The divergence was already pronounced before voting. On Oct. 21, Polymarket showed Bolsonaro near 80% and Lula near 20%, while Kalshi put them at roughly 79% and 21%. Yet a 16-poll average published Oct. 20 gave Bolsonaro a far narrower 51%-49% lead, and individual surveys ranged from a 52%-48% Bolsonaro advantage to a 50.4%-49.6% Lula edge.

Prediction-market contracts reflect trader expectations about the winner, while polls record stated voting intentions. The first-round result, in which polls had understated Bolsonaro’s support, did not establish that an 80% market probability was properly calibrated for a head-to-head runoff, where vote transfers, abstentions and campaign changes can alter the outcome.

With 99.99% of votes counted, Lula received 64.2 million votes, or 51.78%, to Bolsonaro’s 59.8 million, or 48.22%. Lula had trailed by more than 2.2 million votes in the first round before reorganizing his campaign, appealing to younger voters and stepping up government initiatives.

The victory made Lula the first Brazilian president to win a fourth mandate and the first to win a runoff after placing second in the first round. Bolsonaro refused to concede and sought annulment of the result. Lula’s fourth non-consecutive term begins Jan. 5, 2027.