Senators Adam Schiff of California and John Curtis of Utah sent a letter Friday to Commodity Futures Trading Commission (CFTC) Chairman Michael Selig asking whether the agency is investigating allegedly deceptive advertising by prediction-market platform Polymarket, escalating congressional scrutiny of one of the fastest-growing sectors in online wagering. The bipartisan request follows reports that the company paid influencers to promote fabricated winning bets.
The allegations stem from a Wall Street Journal investigation, which found that Polymarket paid mostly college-age social media creators to produce videos showing themselves placing bets—often on websites created solely for filming—and celebrating large winnings that never actually occurred. According to the newspaper, reporters reviewed more than 1,100 videos and determined that none of the approximately $1.9 million in featured wagers represented genuine trades.
According to the report, the campaign was designed to attract new users to Polymarket’s offshore platform, which is not regulated in the United States. One widely circulated video appeared to show a student turning a $1,000 wager into $100,000, even though the trade itself was entirely fictional.
Polymarket responded by saying it is reviewing its marketing practices. A company spokesperson said the platform remains committed to operating fair and transparent prediction markets and continually evaluates how it communicates with potential customers, although the company did not directly address who authorized the campaign or how the videos were produced.
Congressional concern extends beyond the Senate. Representatives Kevin Mullin of California and Gabe Vasquez of New Mexico previously urged the Federal Trade Commission to investigate whether prediction-market companies including Polymarket and competitor Kalshi engage in deceptive marketing practices, arguing that the industry’s public messaging differs substantially from its regulatory representations.
The industry’s rapid growth has intensified regulatory interest. Prediction markets expanded into a multibillion-dollar business as users increasingly wagered on events ranging from the Super Bowl and World Cup to elections, economic data and geopolitical developments. That expansion has attracted growing attention from lawmakers concerned about consumer protection and financial regulation.
Jurisdiction remains complicated. The Commodity Futures Trading Commission regulates certain prediction markets and has approved a limited U.S.-regulated version of Polymarket’s platform. However, that domestic service currently operates on a restricted basis, while much of the company’s trading activity continues through its offshore platform. Because the alleged promotional campaign involved the international operation, regulators may face additional legal questions regarding enforcement authority.
Founded by Shayne Coplan and headquartered in New York City, Polymarket has already faced significant regulatory and legal scrutiny. Earlier this year, federal prosecutors charged a Google employee with allegedly earning more than $1.2 million through insider trading involving confidential information and prediction markets. Following that case, the company strengthened internal policies restricting trades based on non-public information.
The controversy arrives at a sensitive time for the broader prediction-market industry. Companies including Polymarket and Kalshi continue arguing in multiple court cases that their products represent financial markets rather than traditional gambling. Allegations that promotional materials portrayed fabricated winning trades could undermine those arguments and further complicate ongoing legal battles.
Congress is already considering more than a dozen proposals that would increase federal oversight of prediction markets or limit the types of contracts these platforms may offer. Bipartisan interest from senators and representatives could increase momentum for broader regulation even if the CFTC ultimately decides not to pursue formal enforcement action.
For consumers, the central issue remains confidence. Prediction markets depend on public trust that prices accurately reflect genuine market activity and independently placed wagers. Allegations that a leading platform promoted fictional wins strike directly at that foundation and raise broader questions about transparency, advertising practices and investor protection throughout the rapidly expanding industry.
JBizNews Desk
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