California's once-popular billionaire tax might now be dead on arrival, according to Polymarket and Kalshi odds — will the billionaires get their way?

California Gov. Gavin Newsom is also publicly against the tax, despite advocating for billionaire taxes on the national level. He is not expected to pay anything if the tax passes.

If you believe what prediction markets have to say, the billionaires have no need to worry. The tax won’t pass. But should you believe in what the prediction markets predict?

These markets — which allow users to bet on the outcome of political events, among other things — have seen increased media scrutiny after they seemingly predicted Donald Trump would win the 2024 federal election more accurately than traditional political polls.

But performing well in one political race doesn’t mean prediction markets are expected to accurately predict how every vote will go. Here’s what prediction markets are saying about California’s billionaire tax vote compared to the polls — and why you might not want to bet it all on Polymarket just yet.

Prediction markets are harsh on the tax, but polls still show some hope

As of Oct. 13, both Polymarket and Kalshi are bearish on the measure. Kalshi has the chances of the measure passing at 26%, while Polymarket’s prediction hovers around 25%.

In comparison, more traditional political polls still show “yes” voters ahead of “no” voters, although the path is far from clear.

An early September poll from the Public Policy Institute of California (PPIC) found that 52% of responders said they would vote “yes” on Proposition 40, compared to 46% who said they’d vote “no.” The poll also found that a majority of voters would vote for measures that would heavily limit the power of the Prop 40 tax.

The PPIC also found that “overwhelming majorities” thought the state ballot had too many propositions, and it’s possible this had an impact on what people said they would vote “yes” or “no” on.

Meanwhile, a September poll from Politico found that 46% of respondents would vote “yes” on the initiative, while 40% would vote “no.” That’s a significant change from Politico’s February/March poll, where 50% said “yes” and only 28% said “no.”

The rise in no voters might be due to an increase in campaigning. The no side is undoubtedly the more well-funded side, considering how many billionaires are against the tax.

“The campaign is just starting, and roughly a gazillion dollars are going to be spent on it,” Jon Cohen, the founder of the company who fielded the poll, told Politico.

So, while the polls still show voters are in favor of the tax, they still leave plenty of room for Prop 40’s failure. Prediction markets, however, appear to be much more certain on how the Prop 40 vote will go down.

Why prediction markets aren’t always right on target

Compared to traditional political polling, prediction markets have some unorthodox features that can skew the results.