Prediction markets are moving fast as the race to succeed Governor Gavin Newsom has officially entered the territory of pure volatility. While California’s election is still months away, theKalshi contract on “California Governor's winner?” shows massive shifts regarding the implied probabilities of two main candidates: Xavier Becerra and Steve Hilton.
Currently, traders believe there is a heavy-favorite that is positioned almost like a locked-in option.
Let’s see how Kalshi is feeling about the political future of The Golden State.
The California Odds: Becerra Leads
Right now, the Kalshi board positions Xavier Becerra as the main candidate to win the California elections. He is the heavy favorite by a wide margin of nearly 90% over Republican candidate Steve Hilton.
Becerra is trading almost like a locked-position, and while there is still a long way to go until the November 3 elections, this margin has shocked analysts.
A recent survey from the Public Policy Institute of California, found Becerra leading Hilton by 25%, which translated to 61% of likely voters backing the former health secretary. That result marks a dramatic shift from California’s June 2 blanket primary, when Becerra finished first with about 28.1%, with Hilton closely following with roughly 24.7%.
According to the PPIC poll, Becerra has successfully united the Democratic base by capturing voters who previously supported other contenders in the packed primary. This includes billionaire Tom Steyer, whose narrow defeat prevented him from moving forward to the general election.
The Evolution Of The Market
Early in the cycle, Democratic Representative Eric Swalwell held a solid grip as the nearest thing to a frontrunner among ten major candidates. However, a high-profile scandal involving misconduct allegations prompted Swalwell to withdraw from the race under immense pressure from Democratic allies. His decision shook up the entire board.
Swalwell's sudden exit fractured the Democratic bloc, leaving a massive pool of undecided progressive voters up for grabs while triggering a parallel market phenomenon on the Republican side, where Steve Hilton emerged as the Republican lead after receiving Donald Trump’s endorsement.
The Rise of Becerra
Up until mid-April, billionaire businessman Tom Steyer held a comfortable lead with a 66.3% chance of succeeding Gavin Newsom, but the positive market sentiment shifted drastically. Xavier Becerra became the clear trader’s favorite to win the California elections. As the former Biden Administration Health Secretary and California Attorney General, he boasts the political experience that many Californian voters seem to favor.
As an initial political underdog, Xavier Becerra heavily benefited from Swalwell’s catastrophic flameout. A few months ago, his poll numbers were firmly in the single digits. After Swalwell’s exit, the former Health Secretary became a conciliatory choice for those who couldn't trust the other Democratic candidates. That’s exactly the line that Kalshi traders are reading.
With a massive trading volume of over $66 million, the contract for the California election winner keeps attracting new traders months before the ballot dance begins. Will Becerra make history as the first Latino to lead California in modern history, or does this already unpredictable election have more surprises in store?
