Two U.S. senators have asked the Commodity Futures Trading Commission to investigate prediction market platform Polymarket following reports that it paid online influencers to stage fake winning wagers. In a letter sent Thursday to CFTC Chair Michael Selig, Senators John Curtis of Utah and Adam Schiff of California called for clarity on the agency’s oversight of digital prediction platforms and questioned whether it has the capacity to regulate them under federal law.
Report alleges staged wins in promotional videos
The request follows a media investigation that said Polymarket coordinated with dozens of content creators to produce simulated bets and fabricated wins using imitation versions of its site. The report reviewed 1,105 videos published between December 2025 and mid-May 2026 and found roughly 70% featured bets totaling about $1.9 million that were not real.
Polymarket said it will conduct an internal audit of its promotional practices to improve marketing accuracy. The CFTC declined to confirm whether an inquiry is underway.
Regulatory pressure intensifies amid past scrutiny
Polymarket has faced regulatory action before. In 2022, it settled with the CFTC over event-based binary options, paying $1.4 million in penalties and agreeing to block U.S. users. Two years later, federal agents seized devices belonging to CEO Shayne Coplan as part of a separate investigation.
Concerns have also emerged around potential insider activity. Authorities charged U.S. Army soldier Gannon Ken Van Dyke, 38, for using confidential information to place a bet that reportedly generated more than $400,000 tied to the removal of Venezuelan President Nicolás Maduro.
Federal and state battle over oversight
The senators’ letter adds pressure at a time of growing tension between federal and state regulators over prediction markets. The CFTC maintains these platforms fall under its jurisdiction, framing their contracts as financial swaps rather than gambling products.
That stance has triggered legal disputes across the country. The agency recently sued Kentucky to prevent enforcement of state gambling laws against prediction platforms and has now taken action against nine states attempting similar crackdowns.
Lawmakers warned that federal oversight should not allow companies to bypass local gambling laws or promote betting through misleading advertising. They also requested details on any review into Polymarket and reaffirmation of state and tribal regulatory roles.
Rapid growth raises stakes for regulation
The industry’s rapid expansion has amplified the urgency of these concerns. Global trading volume surpassed $44 billion in 2025 and approached $30 billion in April 2026 alone. Polymarket has reported annualized revenue above $1 billion, with daily trading volume on its U.S. platform rising from about $50 million in mid-May to more than $200 million by June 20, fueled in part by World Cup interest.
Allegations of deceptive marketing strike at the credibility of these platforms. If confirmed, they could drive the CFTC to impose stricter rules on advertising, disclosures, and the use of paid promoters across the sector.
Rulemaking process underway
The CFTC has already moved toward tighter oversight, issuing a proposed rule on June 10, 2026, to clarify how it determines whether event contracts are against the public interest. Public comments are open until July 27.
Curtis and Schiff have asked the commission to respond by July 10, a deadline that could indicate whether a formal investigation is underway. The outcome of that response, along with ongoing lawsuits and rulemaking, is expected to shape how prediction markets operate in the United States and define the limits for traders participating in them.
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