Brazilian president and presidential candidate Luiz Inácio Lula da Silva waves the national flag during an election rally in Sao Paulo, Brazil, September 26, 2026.
Miguel Sincariol | AFP | Getty Images
Luiz Inacio Lula da Silva was re-elected as Brazil’s president in Sunday’s run-off election, but it was an upset that prediction market odds could not have predicted.
Lula defeated right-wing candidate Flavio Bolsonaro, son of former President Jair Bolsonaro, 51.8% to 48.2%, according to the country’s High Electoral Court.
As of Sunday afternoon, Lula remained the big underdog in prediction markets. As of just after 8:30 p.m. ET on Sunday, Mr. Lula’s odds of beating Mr. Carsi were 21%.
After the first round of voting on October 4, Bolsonaro’s odds in prediction markets skyrocketed, with Calci and Polimarket saying there was more than an 80% chance that Bolsonaro would oust Lula. Carsi’s contract read, “Who will win the Brazilian presidential election?” This was confirmed by an Associated Press report.
Karshi co-founder and CEO Tarek Mansour previously defended Karshi’s electoral contract. Carsi said in August that there was a 95% chance that Democratic socialist Francesca Hong of Wisconsin would defeat Milwaukee County Executive David Crowley in the Democratic gubernatorial primary. Instead, Hong lost the race by less than 1 percentage point.
In an August 12 post on social media “That should happen one in 20 times. If 5% of candidates don’t win, the market will collapse.”
Odds and Prediction Market Platforms are not replacements for political polls as they do not use the methodology used in traditional political polls.
Political polls had shown a close race in the days leading up to the race, contrary to prediction market odds that showed a clear victory for Bolsonaro.
Brazil’s Supreme Court also extended voting by two hours late on Sunday, which Bolsonaro argued would hurt his chances of winning the presidency. According to Reuters, Bolsonaro is expected to contest the results.
Brazil stocks and ETFs fell on Monday following Lula’s victory. The iShares MSCI Brazil ETF (EWZ) fell 22%, while the U.S.-listed shares of Itau Unibanco and Banco Bradesco fell nearly 20% and 30%, respectively. Breweries Ambev and Petrobras each fell more than 15%.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
