US senators urge CFTC probe into Polymarket marketing practices

Two US senators have called on the Commodity Futures Trading Commission (CFTC) to investigate allegations that prediction market operator Polymarket used staged trading videos, simulated betting activity, and undisclosed influencer marketing to promote its platform.

In a June 25 letter addressed to CFTC Chairman Michael S. Selig, Senators John Curtis (R-Utah) and Adam Schiff (D-Calif.) requested the agency disclose whether it is investigating the conduct described in a Wall Street Journal investigation and whether the reported practices violate federal law or CFTC regulations. The senators also requested written responses to six regulatory and consumer-protection questions by July 10.

The lawmakers wrote that the reported allegations “are deeply troubling and demand immediate scrutiny.”

“The public-facing behavior alleged here does not resemble a sober financial market designed for hedging or price discovery,” Curtis and Schiff said in the letter. “We remain concerned that the Commission is neither enforcing the law appropriately, nor is equipped to serve as a federal gambling regulator.”

Marketing campaign draws regulatory attention

According to reporting cited by the senators, Polymarket allegedly paid social media creators to produce videos showing trades conducted on websites designed to resemble the company’s platform, despite the transactions not being real.

The reports also alleged that creators did not disclose they were compensated, some videos used altered news headlines or outdated footage to suggest substantial winnings, and overseas workers were hired to increase the distribution of the content to US audiences.

The Wall Street Journal reviewed 1,105 videos produced primarily by college-age creators. Nearly 10% of the videos reportedly used outdated footage or modified headlines to indicate combined winnings of almost $900,000. According to the newspaper’s analysis, if the trades had been genuine, they would instead have generated losses exceeding $166,000. Many of the videos described the trades as “free money.”

Lawmakers said the campaign may have created a misleading impression of potential returns and platform activity.

The senators’ letter also argued that prediction market operators should not avoid consumer-protection measures typically applied to regulated gaming operators by offering betting-style contracts as federally regulated financial products.

The letter referenced advertising standards, age restrictions, responsible gaming requirements, integrity monitoring and state and tribal regulatory frameworks as examples of safeguards applied to traditional gaming operators.

Existing probe reported as congressional scrutiny expands

The request comes as reports from The Wall Street Journal indicate the CFTC is already conducting an ongoing investigation into Polymarket, citing people familiar with the matter. The agency has not publicly confirmed the investigation, and a CFTC spokeswoman declined to comment.

If confirmed, the reported inquiry would be the first publicly known enforcement investigation involving a prediction market during Chairman Selig’s tenure. A previous joint investigation by the CFTC and the US Department of Justice into Polymarket’s compliance with an earlier settlement concluded in July 2025 without charges after regulators dropped the case.

The senators also asked whether the CFTC has taken steps since its 2022 enforcement action against Polymarket to prevent the company from marketing offshore services to US users through affiliates, contractors, or influencers. They further requested clarification on whether prediction-market operators may lawfully use simulated trading content in advertising without clear disclosure and what consumer-protection standards currently apply to influencer marketing, advertising, age verification and responsible gaming tools.

Company response and legal challenges

Following publication of the Wall Street Journal investigation, the company previously said it is committed to maintaining accurate and transparent markets and is conducting an audit of its active promotional content. Separately, the company said it is reviewing the allegations and examining its marketing practices.

Polymarket has also been named in a lawsuit filed by the National Association of Consumer Advocates in Washington, D.C. The complaint names Chief Executive Shayne Coplan and Chief Marketing Officer Matthew Modabber, alleging the company targeted college students through deceptive advertising designed to encourage trading while minimizing the likelihood of financial losses.

According to the complaint, Polymarket “aimed to attract young people to place bets on their platforms using a method likely to be effective: showing them social media videos of popular and respected young people enjoying a Polymarket platform.”

“But rather than pursue this goal lawfully, Defendants used many layers of manipulation to trick college-aged consumers, who suffered significant harms as a result.”

The lawsuit seeks unspecified monetary penalties and an injunction to stop the marketing practices described in the Wall Street Journal investigation.

Prediction markets remain under congressional review

Federal oversight of prediction markets has received increasing bipartisan attention in recent months.

More than a dozen Senate Democrats recently urged an appropriations subcommittee to prevent the CFTC from limiting state and tribal regulation of prediction markets. Separately, Rep. James Comer, chairman of the House Oversight Committee, launched an investigation into insider trading controls at both Polymarket and Kalshi. The committee has since received briefings from both companies regarding their compliance measures, and the investigation remains ongoing.

Polymarket was prohibited from serving US users in 2022 after reaching a settlement with the CFTC over operating an unregistered event-based binary options platform, resulting in a $1.4 million civil monetary penalty and an order to cease violating the Commodity Exchange Act. The senators’ letter argues that subsequent allegations involving influencer marketing and simulated trading activity warrant additional regulatory review as the company seeks to expand its presence in the US market.