What Prediction Markets Say About Brazil’s Runoff

BRAZIL ELECTIONS 2026 · PREDICTION MARKETS

Prediction markets now make Flávio Bolsonaro the clear favourite to beat President Lula in Brazil’s runoff on Sunday, 25 October. On Monday, 5 October, Polymarket put his chance at about 85% and Kalshi at 82%, up from roughly 63% before he won the first round.

For investors, campaigns and anyone with money in Brazil, these prices are a fast, public reading of how the race is moving. This article explains what the markets say, how the odds moved, what else traders are pricing for Brazil and why prediction markets have become a must-watch in the United States.

For dates, rules and candidates, see our full Brazil runoff guide. Live odds for every market in the region are on our Prediction Markets page.

What Prediction Markets Say

Prediction markets let traders buy contracts that pay US$1 if an outcome happens, so a price of 85 cents reads as an 85% chance. On Brazil’s presidential race, the two leading platforms agree: Flávio Bolsonaro is a strong favourite and Lula a clear underdog.

A favourite at 85% still loses about one time in seven. The runoff is three weeks away, with a televised debate, campaign advertising and possible endorsements still to come.

How the Odds Moved Through the First Round

Two months ago, the market saw Lula as the favourite. Polymarket’s daily prices show how that flipped:

• 1 August: Lula 64.5%, Flávio 25.4%.
• 30 August: Lula 55.5%, Flávio 40.8%.
• 11 September: Flávio pulled ahead, 54.6% to 43.5%, and has led on every daily reading since.
• 1 October: Flávio 62.3%, Lula 36.5%.
• 2 October: Lula recovered to 42.5% and Flávio slipped to 55.6%, a reminder of how fast prices move.
• 4 October, morning of the vote: Flávio 63%, Lula 36.5%.
• 5 October, after the count: Flávio 84.8%, Lula 14.5%.

When Polymarket opened the market in September 2025, Lula traded in the mid-to-high 50s. Flávio’s contract started trading in November 2025 at about 2% and touched about 1% at the end of that month.

What the Markets Got Right and Wrong

Before the vote, most final polls from the major pollsters had Lula ahead in the first round. Datafolha’s last survey, published on 3 October, showed Lula at 42% and Flávio at 40% of all respondents, and Quaest had Lula at 40% and Flávio at 38%; the official result counts valid votes only.

Polymarket’s traders made the same mistake. Its first-round market gave Lula a 72.5% chance of finishing first on the evening of 3 October and still about 64% around midday on the day of the vote.

Flávio then finished first with 47.03% of valid votes to Lula’s 45.16%, according to the electoral court (TSE). Lula himself said he had expected to win in the first round, InfoMoney reported.

Where the markets were ahead was the bigger question. Even while they expected Lula to edge the first round, traders already made Flávio the favourite to win the presidency, at about 63% on the morning of the vote.

One good call proves little. A study of the Iowa Electronic Markets found market prices closer to the final result than 964 national polls 74% of the time across the US presidential elections from 1988 to 2004.

A 2025 Vanderbilt University study of about 2,500 markets on the 2024 US election was more sceptical: 67% of Polymarket’s and 78% of Kalshi’s markets pointed to the right outcome, but similar markets were priced differently across platforms. Read the odds next to polls, not instead of them.

What Else Traders Are Pricing for Brazil

The presidential race is not the only Brazil market. As of 5 October, traders priced these outcomes in smaller markets that are thinly traded, so their prices can swing sharply:

• Interest rates: Polymarket gives a 73% chance that Brazil’s central bank cuts its benchmark Selic rate by 0.25 percentage points at its November meeting.
• A Trump endorsement: traders see a 55% chance that Donald Trump endorses Flávio before the runoff. Trump cited the trial of Flávio’s father, former president Jair Bolsonaro, when he raised US tariffs on Brazilian goods to 50% in 2025.
• The Supreme Court: traders give about a 20% (Polymarket) to 26% (Kalshi) chance that Justice Alexandre de Moraes leaves the court by the end of 2026. Moraes led the case in which Jair Bolsonaro was convicted of plotting a coup in September 2025.

Why Prediction Markets Have Become a Must-Watch

The idea is simple: people with money at stake have a reason to be right, so prices pull together scattered information and move within minutes of the news. What has changed is the scale.

Combined monthly trading on Kalshi and Polymarket rose from US$810 million in July 2024 to US$2 billion in July 2025 and about US$53 billion in July 2026, according to the Pew Research Center. Sports drive most of that growth, but elections made the platforms famous.

Polymarket’s market on the 2024 US presidential election alone traded US$3.64 billion. Since then, the money and the mainstream have followed:

• Wall Street: Intercontinental Exchange, owner of the New York Stock Exchange, agreed in October 2025 to invest up to US$2 billion in Polymarket and in March 2026 added a further US$600 million, completing that commitment.
• Valuations: Kalshi raised US$1 billion at a US$22 billion valuation in May 2026, and Polymarket was reported in September 2026 to be raising US$1 billion at US$21 billion.
• Newsrooms: CNN and CNBC signed data deals with Kalshi in December 2025, and Dow Jones signed one with Polymarket in January 2026.
• Retail investors: Robinhood earned US$156 million from event contracts in the second quarter of 2026, more than ten times a year earlier and more than from crypto trading.

Regulation made the growth possible. Kalshi has been a CFTC-designated exchange since November 2020 and won a court fight in 2024 that let it list US election contracts before that year’s vote.

Polymarket paid a US$1.4 million CFTC penalty in January 2022 for operating without registration and won CFTC approval for regulated US trading in November 2025. Courts remain split on sports contracts, and New Jersey asked the Supreme Court to take up the question in September 2026.

Brazil Banned Election Betting, but the Market Trades On

Brazil’s National Monetary Council banned derivatives tied to sports, online games and political, electoral, social, cultural or entertainment events with Resolution 5.298, in force since 4 May 2026. Contracts on economic figures such as inflation, interest rates and exchange rates remain legal.

On 24 April 2026, the Finance Ministry said the telecom regulator Anatel had blocked 27 prediction-market platforms, including Polymarket and Kalshi. Polymarket lists Brazil among the countries where users can only close existing positions.

The race still drew money. Agência Pública estimated that US$141.7 million had been bet on Brazil’s election on Polymarket by 2 September, and the ministry’s betting secretariat had Polymarket’s Portuguese-language Instagram profile blocked on 22 September, SBT News reported.

The platforms do not publish where their traders are, but with trading illegal in Brazil, much of the money likely comes from abroad. Kalshi has also moved into Brazil on the legal side: in March 2026 it announced a deal with the broker XP to offer contracts on Brazilian inflation and interest rates.

What It Means for You

If you hold Brazilian stocks, US-listed Brazilian companies or the real, the odds offer a running view of which government traders expect from January 2027. A sharp swing back toward Lula would signal that the race has changed.

If you follow the race, watch how the prices react to the 11 October debate and to the next polls. Big moves in a short time usually follow news, and our Latin America Prediction Markets page shows them every 30 minutes.

What Is Not Known

• Whether Flávio’s lead in the markets holds through the debate and the last three weeks of the campaign.
• How much of the money comes from outside Brazil, since the platforms do not publish trader locations.
• Whether Brazilian authorities take further steps against the platforms before the runoff.

What do prediction markets say about Brazil’s runoff?

On 5 October 2026, Polymarket gave Flávio Bolsonaro about an 85% chance of winning the runoff on 25 October and Kalshi 82%. Lula stood at 14.5% on Polymarket and 18% on Kalshi.

Are prediction markets better than polls?

Sometimes. A study of the Iowa Electronic Markets found prices closer to the result than national polls 74% of the time in US presidential elections from 1988 to 2004, but newer research finds prices for the same event often differ between exchanges. They work best read next to polls.

Can Brazilians bet on the election?

Not legally. Resolution 5.298 of Brazil’s National Monetary Council has banned contracts on elections since 4 May 2026, and the telecom regulator Anatel has blocked Polymarket and Kalshi.

Why are prediction markets so popular in the United States?

Kalshi is regulated by the CFTC, a 2024 court ruling let it offer election contracts, and combined monthly trading on Kalshi and Polymarket reached about US$53 billion in July 2026. CNN, CNBC and Dow Jones now use their data in news coverage.

Sources: Polymarket and Kalshi public market data (read 5 October 2026), TSE official results, Pew Research Center, CFTC (Kalshi designation), CFTC (Polymarket order), ICE, Robinhood Q2 2026 results, Lefosse on Resolution 5.298, Agência Pública, SBT News, University of Iowa, InfoMoney. Prices are bets, not polls, and they move quickly. As of 5 October 2026.

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