Lula Wins Brazil Election After Polymarket Put His Odds Near 20%

Luiz Inácio Lula da Silva won Brazil’s presidential election after Polymarket put his chance of victory at about 20% before voting, highlighting the gap between market odds and an election outcome.

Before ballots were cast, the market gave Flávio Bolsonaro an 80% chance of winning. Lula’s victory secured his fourth presidential term.

FhantomBets, a large Polymarket trader, argued that retail traders’ bearish positioning on Lula lifted Bolsonaro’s implied odds. The trader said professional traders put Lula’s election-day chances at 30% to 40%.

CoinShares senior researcher Luke Nolan cautioned against explaining the difference solely as a split between professional and retail traders. Nolan and TxODDS co-founder and CEO Einar Knobel pointed to Brazil’s ban on prediction markets as a possible contributor to the pricing gap. Knobel said most traders in the market were based outside Brazil and that its volume was 4.5% of Polymarket’s 2024 U.S. presidential election market.

Nolan noted that an event carrying a 20% probability can still occur about one time in five.