Governor Gavin Newsom is racing to stop a proposed tax on California billionaires from reaching the November ballot, with a June 25 deadline to kill the measure. At the same time, prediction market Polymarket shows users betting heavily that Newsom will veto a sweeping artificial intelligence safety bill — and pricing a 99% chance of what traders call a 'Shepherd loss.'
The billionaire tax fight
Newsom is working to prevent the initiative, which would impose a special tax on the state's wealthiest residents, from qualifying for the general election. The effort has taken on urgency as the cutoff to remove the proposal from the ballot approaches later this month. Backers of the tax argue it could raise billions for public services, but the governor's office has not publicly detailed its opposition strategy.
Polymarket's $14 million bet on SB 1047
On Polymarket, a platform where users wager on political and policy outcomes, traders have staked more than $14 million on the fate of California's AI safety bill, SB 1047. The legislation, which would require developers of advanced AI systems to implement safety protocols and face liability for harms, awaits Newsom's signature or veto by September 30. As of now, the market overwhelmingly predicts a veto — a sign of how the governor's stance is being read by political gamblers.
Separately, Polymarket's pricing for a 'Shepherd loss' — a term used in the prediction market — has reached 99%, though the specifics of that bet remain unclear. The figure suggests near-certainty of an outcome tied to Newsom's maneuvering.
Replacement talk and national stakes
The speculation doesn't end in Sacramento. With President Joe Biden trailing Donald Trump in Polymarket's presidential odds, chatter has intensified that Newsom could replace Biden at the Democratic National Convention. While no formal mechanism has been invoked, the possibility highlights how Newsom's actions on state-level issues — from taxes to AI regulation — are being watched as signals of his national ambitions.
For now, the governor faces two concrete deadlines: June 25 to block the billionaire tax, and September 30 to decide on SB 1047. Both decisions carry weight far beyond California's borders.
