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Spotify Removes 500,000 Fake Streams After Prediction‑Market Bets Decided Payouts

The corrections expose that real‑money markets that settle on public metrics can create incentives to game streaming data, prompting platform and regulatory scrutiny.

Overview

  • Spotify said Wednesday it investigated a sudden 70% jump in plays for Malcolm Todd’s “Earrings,” removed more than 500,000 artificial streams, and adjusted its U.S. daily chart so the song fell from No. 1 to a lower position.
  • A Kalshi market on June’s most‑streamed U.S. song, which drew about $3 million in trading, was settled using the published figures before Spotify completed its fraud review and winners were paid out.
  • Kalshi trader Caleb Davies publicly flagged the anomaly with statistical evidence; Kalshi says it is cooperating with Spotify on an investigation and Polymarket says it did not list Todd as an option on its comparable market.
  • At Spotify’s request, both Kalshi and Polymarket have been asked to remove Spotify branding and to clarify there is no official partnership, and Spotify said it withholds royalties for streams it deems artificial.
  • The episode highlights a structural risk: prediction markets that pay on public, revisable data can create financial motives to manipulate measurable outcomes and have drawn renewed attention from regulators including the CFTC and lawmakers.