Steyer Drops 17 Points to 38% as $115M Spending Fails to Hold California Lead

Tom Steyer's $115 Million Campaign Is Losing Ground, and California's Prediction Markets Are Taking Notice

Tom Steyer has spent over $115 million on his campaign for California governor, nearly 30 times more than his closest Democratic rival, according to the Associated Press. That sum has purchased saturation-level advertising across every major media market in the state. What it has not purchased is momentum. As of April 23, Steyer polls at just 10.3% in the RealClearPolitics average, trailing Republican Steve Hilton (14.7%), the recently-withdrawn Eric Swalwell (13.7%), Republican Chad Bianco (13.0%), and Democrat Katie Porter (11.3%).

The prediction markets have responded accordingly. Steyer's implied probability of winning the governorship has fallen from 55% to 38% on both Kalshi and PredictIt over the past three days, a 17-percentage-point collapse that ranks among the sharpest short-term reversals in any active gubernatorial contract this cycle. The price briefly touched 36% before recovering two points to its current level. That recovery looks more like a dead-cat bounce than stabilization.

The paradox is structural. In most races, a narrowing field benefits the best-funded candidate. Steyer had every reason to expect that the departures of Swalwell and former State Controller Betty Yee would consolidate the Democratic lane behind him. Instead, the opposite is happening. Voters freed by those exits are moving toward Xavier Becerra, and the market is pricing Steyer's inability to absorb them as a fundamental weakness, not a temporary fluctuation.

How Eric Swalwell's Exit Reshuffled the 2026 California Governor Race Away from Steyer

Eric Swalwell's withdrawal from the race, triggered by sexual misconduct allegations including rape accusations from multiple former staffers, removed the leading Democrat from the primary. Swalwell had been polling at 13.7%, holding a base of younger, progressive, Bay Area-heavy voters who should have been natural Steyer targets. Betty Yee's suspension two days later further fragmented the Democratic side.

Steyer's campaign clearly anticipated inheriting these voters. Jane Fonda's endorsement, released April 22, explicitly contrasted Steyer with the "impossible to trust" Swalwell. The strategy was transparent: define Steyer as the trustworthy progressive alternative the moment Swalwell's coalition was up for grabs. But endorsements from 87-year-old Hollywood activists do not automatically translate into voter migration, especially when a credible institutional Democrat is offering an alternative.

The timing tells the story. Steyer's market price began its slide within hours of reporting that Swalwell's exit was benefiting Becerra, not Steyer. The AP reported on the televised debate April 22 among six remaining candidates, an event where Steyer's performance apparently failed to arrest his decline. California's jungle primary system, where the top two finishers advance regardless of party, means Democratic vote-splitting is an existential threat. If Becerra and Steyer divide the progressive base while Hilton and Bianco consolidate the Republican vote, two Republicans could advance to the general election in a state that hasn't elected a Republican governor since Arnold Schwarzenegger.

Xavier Becerra Is Absorbing the Post-Swalwell Vote, and Prediction Markets Are Pricing It In

Xavier Becerra polls at just 4.3% in the most recent RealClearPolitics survey, a number that looks trivial until you consider the trajectory. The Daily Beast characterized Becerra as a "dark horse" receiving a "sudden jolt" in the wake of Swalwell's departure. His resume as former California Attorney General and Biden's Secretary of Health and Human Services gives him the institutional credibility that Steyer's billions cannot manufacture. He is a career politician in a race where the billionaire outsider narrative has failed to gain traction despite record spending.

The market's 17-point repricing of Steyer is not solely a Becerra story. It reflects a broader reassessment of whether money can substitute for coalition-building in California's unique primary structure. Steyer at 38% still leads the prediction market field, which means bettors believe he remains the single most likely winner. But a candidate whose probability drops from 55% to 38% while spending $115 million is a candidate whose marginal dollar is producing no measurable persuasion.

Becerra's appeal to Swalwell's former voters is straightforward. He shares their Democratic institutional identity without the baggage of being a billionaire self-funder in a state where progressive voters are deeply skeptical of concentrated wealth. He also carries a Newsom-adjacent profile that resonates with the governor's still-popular base. If Becerra consolidates even half of Swalwell's 13.7% share, he jumps to roughly 11%, surpassing Steyer in polling while spending a fraction of the money.

The Bull Case for Steyer: Why California's Prediction Markets Could Be Dead Wrong

The strongest argument for Steyer at 38% being undervalued is simple: money wins primaries, especially low-turnout jungle primaries. California's June 2 primary is six weeks away. Steyer's $115 million war chest gives him the ability to run sustained negative campaigns against every rival simultaneously, a luxury no other candidate possesses. In a fragmented field with six or more viable candidates, name recognition and ad saturation can be decisive even at modest polling numbers. Steyer at 10.3% in a field where the leader is at 14.7% is not far from striking distance when voter preferences remain fluid.

There is also the question of whether Becerra's surge is real or speculative. A candidate at 4.3% in polls who is generating market enthusiasm based on narrative rather than demonstrated voter support is exactly the kind of candidate prediction markets overvalue in the early stages of a race. Swalwell's voters may not move to anyone in particular; they may simply stay home, depressing Democratic turnout and making the Republican path to a top-two finish more plausible. In that scenario, Steyer's spending advantage becomes more valuable, not less, because he can mobilize low-propensity voters through direct mail and digital targeting at a scale Becerra cannot match.

The debate performance matters here too. The April 22 event was Steyer's first opportunity to make a case directly to a statewide audience without the filter of paid advertising. If post-debate polling shows any movement toward Steyer, the current 38% price could look like a buying opportunity. Markets overshoot in both directions, and a 17-point drop in three days has the hallmarks of panic selling rather than careful repricing.

But the burden of proof is now on Steyer. A candidate who has spent more than any non-presidential campaign in recent memory and still trails three rivals in public polling must demonstrate that his money can do something it has not done in four months of campaigning: actually move votes. The market will resolve on November 3, 2026. Between now and then, the June 2 primary will determine whether Steyer even makes the general election ballot. At 38%, the market is saying he probably does, but with rapidly declining confidence. That assessment looks right.