Luiz Inácio Lula da Silva was reelected president of Brazil on Sunday in a runoff election, an upset that prediction markets odds failed to anticipate.
Lula defeated Flávio Bolsonaro, the right-wing candidate and son of former president Jair Bolsonaro, by 51.8% to 48.2%, according to the country's Superior Electoral Court.
As late as Sunday afternoon, Lula remained a significant underdog on prediction markets. Even just after 8:30 p.m. ET on Sunday, Lula's odds were at 21% on Kalshi.
Bolsonaro's odds on prediction markets surged after first-round voting on Oct. 4, with both Kalshi and Polymarket giving Bolsonaro an over 80% chance of ousting Lula. The Kalshi contract asked, "Brazil Presidential election winner?" and was verified by reporting from the Associated Press.
Kalshi co-founder and CEO Tarek Mansour has previously defended Kalshi's election contracts. In August, Kalshi reflected a 95% likelihood of Wisconsin Democratic socialist Francesca Hong winning the Democratic gubernatorial primary over Milwaukee County executive David Crowley. Instead, Hong lost the race by less than 1 percentage point.