Petey Piranha's (and King Boo's) special item in Mario Kart: Double Dash!! is randomly the special item of any other character.
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No, he is not. I don't think he will ever be in a Mario Kart game.
The exact reason is unknown, but there is a kart modeled after him (Piranha Prowler)and he was originally planned to be in the game (Beta Character Selection Screen icon of Petey found)
Fireballs(Mario/Luigi), Heart(Princess Peach/Princess Daisy), Yoshi's Egg/Birdo's Egg(Yoshi/Birdo), Chain Chomp(Baby Mario/Baby Luigi),Bob-omb(Wario/Waluigi), Bowser's Shell(Bowser/Bowser Jr.), Giant Banana(Donkey Kong/Diddy Kong), Triple Shells(Koopa/Paratroopa) Golden Mushroom(Toad and Toadette), Petey Piranha and King Boo have the ability to obtain any special item.
No, but the Piranha Prowler, a large kart, was modeled after him. Additionally, a beta character selection screen icon of him was found in the game's files.
Win Mirror Star Cup. This also unlocks The Piranha Pipes Kart and King Boo.