California nominee Xavier Becerra refunds prediction-market donations while trading at 96% to win the governorship

Xavier Becerra, the Democratic nominee for California governor, is returning contributions from prediction-market businesses even as traders on Kalshi and Polymarket give him a 96% chance of winning, according to defirate.com. The refunds highlight a potential conflict between operating election markets and financing candidates listed in them.

Attorney Daniel Wallach drew attention to the refunds on X on October 3, 2026. He said Becerra’s campaign-finance statement, filed the previous week, disclosed the return of maximum contributions of $39,200 from Kalshi and $50,000 from Underdog Sports Holdings, defirate.com reported.

Campaign money meets election pricing

Kalshi contributed $39,200 days before the June primary, when Becerra, a former attorney general, was already the favorite on its platform. At the time, it was the company’s second-largest reported contribution to a California candidate. Questions about the overlap between campaign financing and election trading followed; the refunds do not establish that either the campaign or the platform broke campaign-finance law.

Becerra’s market position has strengthened since late May, when Kalshi priced his chances at roughly 74%, shortly after the contribution became public. Defirate.com now reports a 96% probability on both major platforms, with more than $72 million traded on Kalshi’s California governor market and roughly $41 million on Polymarket. Their combined volume exceeds $100 million, but those prices remain traders’ assessments—not an election outcome.

A wider contest over regulation

The donations sit within an industry effort to secure its ability to offer event contracts nationwide. Prediction-market companies contend that their products fall under federal regulation through the Commodity Exchange Act. States, tribal governments, gaming regulators and traditional sportsbooks increasingly argue that sports-outcome contracts constitute gambling and should face state licensing, taxation and consumer-protection requirements, according to defirate.com.

An OpenSecrets review cited by defirate.com found that Kalshi, Polymarket and the Coalition for Prediction Markets spent at least $3 million on federal and state lobbying and campaign contributions in 2026. Kalshi’s contributions included $150,000 to the Democratic Governors Association, $100,000 to the Republican Governors Association and more than $300,000 combined to the Democratic and Republican attorneys general associations.

In California, Kalshi reported $62,000 in lobbying during the first half of 2026, covering three Assembly bills and prediction-market outreach to the governor’s and attorney general’s offices. Those offices matter to the industry: state attorneys general are pursuing legal challenges to sports-event contracts, while governors and lawmakers influence regulatory priorities, legislation and potential operating restrictions.

The Becerra refunds bring that political activity into direct contact with the platforms’ role as election indicators. Market prices are formed by traders rather than a company selecting a winner, so corporate contributions do not by themselves demonstrate inaccurate odds. Nevertheless, financing a candidate while offering contracts on that candidate’s election raises questions about influence and market integrity.

What it means for prediction markets

• Separate probability from conduct: The reported 96% prices describe traders’ expectations. They do not resolve concerns about platform political spending or guarantee Becerra’s victory.
• The refunds are not evidence of an odds reaction: The reporting provides current prices and a late-May comparison, but does not establish a market move caused by the returned contributions.
• Regulatory stakes extend beyond this race: Spending on governors, attorneys general and lobbying connects the industry to officials who can influence whether—and under what rules—event contracts operate.