U.S. senators seek CFTC probe into Polymarket marketing practices

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Senators seek CFTC probe into Polymarket

Highlights

Senators John Curtis and Adam Schiff asked CFTC Chair Mike Selig to clarify by July 10 whether the agency is investigating Polymarket's allegedly deceptive influencer marketing practices.
The Wall Street Journal found 70% of over 1,100 analyzed Polymarket promotional videos showed fake bets totaling nearly $2 million, with most creators not disclosing paid relationships.
CFTC is reportedly conducting an extensive investigation into Polymarket as prediction markets generate billions in monthly volume and face increased regulatory scrutiny over classification as gambling or derivatives.

Senators press for answers on Polymarket promotions

As first reported by The Wall Street Journal, Polymarket allegedly paid social media influencers to create videos showing fake trades on websites resembling its platform, with many creators reportedly failing to disclose the paid relationship. Republican Senator John Curtis and Democratic Senator Adam Schiff said in a Thursday letter to CFTC Chair Mike Selig that the claims suggest the company used deceptive marketing tactics to promote gambling-style products to U.S. audiences.

The senators wrote that, if accurate, the allegations are deeply troubling and warrant immediate scrutiny by the Commodity Futures Trading Commission. Their letter asks Selig to provide written responses by July 10 on whether the agency is investigating Polymarket, whether the reported advertising practices were legal and whether the regulator has sufficient resources to police prediction markets.

The Wall Street Journal reported on June 20 that it reviewed more than 1,100 videos and found that 70% showed fake bets totaling nearly $2 million. Earlier this week, a Polymarket spokesperson told Cointelegraph the company is conducting a comprehensive audit of active promotional content to ensure compliance with its standards and applicable regulatory and legal disclosure requirements.

Broader oversight debate around prediction markets

Polymarket declined to comment on the senators' letter or on reports that the CFTC is already examining the platform. The letter also comes before reports from the Journal and CNBC on Friday that the CFTC is conducting an ongoing and extensive investigation into Polymarket, though CNBC said the timeline for the inquiry was not disclosed.

Prediction markets have surged in popularity, generating billions of dollars in monthly volume, while also drawing fresh scrutiny from lawmakers and state regulators. Curtis and Schiff argued that the CFTC has repeatedly asserted authority over prediction markets and event contracts, yet content creators often portray them as easy money, leaving little basis to treat them differently from gambling.

The senators said such contracts are not in the public interest and should not be treated as derivative products with hedging value. The CFTC maintains that it has authority over prediction markets because the platforms are registered with the agency and operate under federal commodities law, and it has sued nine U.S. states that challenged the platforms as providers of unlicensed sports betting through event contracts.

Our earlier report on the CFTC’s ongoing investigation into Polymarket explained that regulators were examining the platform amid questions about potentially misleading promotional content. We also noted Polymarket’s response, including an audit of active promotions for disclosure and compliance, alongside the broader shift in its U.S. regulatory outlook after reopening access to domestic users.

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