Tom Steyer's Chances of Becoming California Governor After Swalwell Exits
Billionaire philanthropist Tom Steyer has emerged as the favorite to become California's next governor after Representative Eric Swalwell exited the race, triggering a sharp reshuffling in prediction markets tracking the 2026 contest.
Swalwell dropped out of the California governor's race on Sunday and announced he would be resigning from Congress the next day after sexual misconduct allegations, pushing Steyer to the top of prediction market odds.
The sudden shift comes as early voting approaches in a high‑stakes, crowded contest with no incumbent running. Voters, donors, and rival campaigns are recalibrating in a race now dominated-at least on prediction markets-by a self‑funded billionaire.
Newsweek reached out to the campaigns of Steyer and his rivals in the race, Matt Mahan and Katie Porter, for comment via email.
Why It Matters
Swalwell had led prediction markets for months before allegations upended his campaign, creating a vacuum in a race already defined by fragmentation. His sudden exit has accelerated momentum around Steyer, reshaping expectations less than seven months before Election Day.
What To Know
Prediction markets now show Steyer with a commanding lead over his remaining rivals, according to data from Kalshi and Polymarket, two platforms where users trade on real‑world political outcomes.
On Polymarket, Steyer was priced at roughly 59 percent at the time of writing, up a significant 52.7 points from just 6.3 percent on March 22, compared with Matt Mahan at about 14 percent and Katie Porter near 14 percent.
Trading volume on the market has surpassed $9 million, reflecting strong interest following Swalwell's exit.
Kalshi shows a nearly identical picture. Traders there give Steyer a roughly 55 percent chance of winning, up 40.6 points from just 14.4 percent on April 4, while both Mahan and Porter sit at 15 percent. Combined trading volume across governor‑related Kalshi contracts now exceeds $22 million.
Prediction markets function by allowing participants to buy and sell contracts tied to specific outcomes, with prices moving in real time based on trading activity. Supporters argue these markets aggregate information quickly, reacting faster than polls to breaking news.
Critics counter that they can be skewed by wealthy traders, media attention, or momentum effects-and they do not measure voter turnout or campaign infrastructure.
How Swalwell's Exit Opened the Door for Steyer
The latest shift followed allegations of sexual misconduct against Swalwell, which surfaced Friday and prompted swift calls from within his party for him to withdraw.
Swalwell has denied the allegations but suspended his campaign on Sunday.
Ironically, Swalwell had frequently highlighted his own strength on Kalshi during the campaign, once posting that bettors were backing him rather than his rivals. Those same markets now show his chances reduced to near zero.
Steyer, a former hedge‑fund executive who founded Farallon Capital, is estimated by Forbes to be worth about $2.4 billion. He has funded the bulk of his campaign himself, spending more than $120 million as of mid‑April, according to Business Insider reporting.
If elected, Steyer would join a small group of billionaire governors. Currently, Illinois Governor JB Pritzker is the only sitting governor with billionaire status, though others, including Doug Burgum of North Dakota and Jim Justice of West Virginia, have held the office in recent years.
What Happens Next
California uses a top‑two primary system, meaning all candidates, regardless of party, appear on the same ballot, with the two highest vote‑getters advancing to the general election.
The primary election takes place on June 2, 2026. County election officials will begin mailing vote‑by‑mail ballots on May 4, and ballots must be postmarked by Election Day or returned in person by 8 p.m. Polls will be open statewide from 7 a.m. to 8 p.m.
The general election is scheduled for November 3, 2026, with vote‑by‑mail ballots mailed starting October 5 and early voting opening the same day. Final certification of results typically follows several weeks after ballot verification and counting.
While prediction markets suggest Steyer holds a strong advantage for now, they reflect investor sentiment and not actual votes. With months still to go and turnout dynamics yet to be tested, the race remains formally wide open.
Newsweek's reporters and editors used Martyn, our Al assistant, to help produce this story. Learn more about Martyn.
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This story was originally published April 14, 2026 at 9:35 AM.