Prediction Market Odds for Next California Governor

• The race to become the next Governor of California is heating up as the June 2nd primary approaches
• With Gavin Newsom being term-limited, the state will elect its first new governor since 2019
• Over $4.8M has already been traded on this market at Kalshi, with over 220 days to go before it will resolve

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With the field set, there are currently 10 candidates running to be the next governor of California, comprised of eight democrats and two republicans. In a state that takes the top two voter getters from its June 2nd primary regardless of party, this crowded ballot could work against the Democrats.

A Berkley ISG survey shows that the two Republican candidates, Steve Hilton and Chad Bianco, are the favorites to win, with 17% and 16% of the vote, respectively. The poll had Eric Swalwell slightly behind at 14%, Katie Porter at 13%, Tom Steyer at 10%, and the rest of the field holding 5% or less. State Party Leader Rusty Hicks has called for Democratic candidates who cannot make “meaningful progress” by April 15th to drop out of the race to help create a more unified front against the Republican opponents.

While the polls may show a close race with two Republicans in the lead, the prediction markets for this race show a much different story. Traders on Kalshi believe that Eric Swalwell is the clear favorite to be the next California governor, with both Republican options failing to even crack the top three.

Odds for Next California Governor

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As Gavin Newsom eyes a potential run to be the next President of the United States, traders on Kalshi are focused on who will replace the term-limited governor and have shown up in force early with $4.8M in volume already on this market. These traders have not been shy about who they believe will win the governor’s seat, with Representative Eric Swalwell holding a dominant 60% implied win probability, 47% higher than his next closest opponent.

Swalwell has held a commanding lead from the time he announced his run. Entering with an implied win probability of 40%, he has only watched that figure grow as his campaign amps up. Prior to Swalwell joining the race, the early favorite was Katie Porter, who once held a high of 44%, but now sits at just 4%.

The race for second place on Kalshi is tightly contested between billionaire Tom Steyer, at 13%, and San Jose Mayor Matt Mahan, at 13%. Mahan looked like a strong contender on Kalshi when he formally announced his intent to run, hitting a high of 33%; however, that early enthusiasm quickly waned.

Interestingly, while a Berkley ISG found Steve Hilton and Chad Bianco to be the favorites among those polled, these two Republican candidates sit at just 7% and 6% on Kalshi. While Swalwell may be the favorite in this prediction market, the crowded Democratic field could split voters and ensure both Republicans end up on the ballot come November. With their current implied win probability being so low, traders could find value in one of the two Republican candidates pulling off an upset as the Democratic party struggles to consolidate the field.

Eric Swalwell

U.S. Representative Eric Swalwell is both the top polling Democratic candidate, at 14%, and the clear favorite on Kalshi, at 60%, to be the next California Governor. Swalwell has based much of his campaign around keeping President Trump’s policies out of California with a focus on protecting residents regardless of their immigration status and fighting off Trump’s attacks on the blue state. He is following in Gavin Newsom’s footsteps by being a constant presence on the news, taking a vocal stand against the president.

Contributing to his strong lead on Kalshi is backing from politicians and celebrities alike, with endorsements from Senator Adam Schiff of California and actor Sean Penn. As Swalwell has only watched his lead grow since joining the race, it is hard to see him relinquishing his lead. An endorsement from Newsom could all but seal the deal for Swalwell; however, that may not come as Newsom looks to rely on his many friends in California during his bid for the presidency.

Tom Steyer

Tom Steyer is an interesting case to represent the Democrats in this election. While the party works on policies aimed at wealth inequality, electing a billionaire with no political experience could be a tough sell to the more progressive voters. However, Steyer may be one of the more progressive candidates in the mix. He has been a leader in California on the fight against climate change and has called for the wealthy to be taxed more.

Helping his cause is the fact that he has been able to bankroll his own campaign, having already spent $30 million on ads to raise his name recognition and platform. While he may lack a background in politics, he has garnered powerful endorsements from Representative Ro Khanna and the California Nurses Association. Between his past climate activism, his desire to tax the wealthy, and support from two major players in the state, he may be able to overcome the party’s prejudice against billionaires and use his money to help make meaningful change in the state as the next governor of California.

Sitting at 13% on Kalshi, he has a long way to go before the June 2nd primary and will likely need to get a few more endorsements if he hopes to catch Swalwell.

Matt Mahan

Matt Mahan, the mayor of San Jose, is tied for second with Tom Steyer on Kalshi at a 13% implied win probability. While he may be tied with Steyer in the prediction markets, in the polls, he only received 4% of the vote to Steyer’s 10%. However, he remains confident that he can sway voters before the primary by presenting himself as an option for the moderates.

While Mahan may not be a billionaire like Steyer, he is backed by more billionaires than any other candidate and has received millions from tech executives. His source of funding may make him an even harder candidate to back than Steyer, as voters may see him being compromised through these campaign donations. Further hurting his chances is that he is unlikely to get an endorsement from Newsom, as he has not been afraid to criticize the sitting governor.

He may be a top-three option on Kalshi, but real-world polling tells a very different story, making Mahan’s run seem like a long shot that could ultimately do more harm to the party than good if he sticks around for the primary.