Lawmakers Push CFTC to Probe Polymarket Over $1.9M Fake Betting Scheme

TLDR

• Cross-party senators Schiff and Curtis called on the CFTC to probe Polymarket following allegations of fraudulent advertising practices
• WSJ analysis revealed approximately 70% of 1,105 creator videos displayed staged wagers totaling around $1.9 million
• Sources indicate the CFTC has an active probe into Polymarket’s operations
• Advocacy organization filed lawsuit against Polymarket in Washington DC over misleading marketing toward students
• The platform previously reached a settlement with the CFTC in 2022, paying $1.4 million in penalties

Democratic Senator Adam Schiff and Republican Senator John Curtis dispatched correspondence to CFTC Chairman Michael Selig this Thursday, demanding regulatory scrutiny of the prediction platform Polymarket.

Their communication arrives in the wake of a Wall Street Journal exposé released on June 20, which revealed the platform compensated content creators to stage wagers on mock versions of its interface.

Journalists at the Journal analyzed 1,105 promotional clips from 10 different influencers spanning December 2025 through mid-May 2026. Approximately 70% contained footage of bets being executed. Every single wager shown, collectively worth nearly $1.9 million, was fabricated.

The lawmakers characterized these practices as “deceptive marketing tactics to promote gambling-style products to US audiences.”

Polymarket responded by stating it is executing a “comprehensive audit of active promotional content” to verify compliance with regulatory and legal disclosure standards.

CFTC Investigation Already Underway

According to a Friday CNBC report, citing an anonymous source with knowledge of the situation, the CFTC has launched a substantial and ongoing investigation into Polymarket. When contacted by The Block, the regulatory agency stated it cannot confirm or deny the existence of any investigation.

This marks another chapter in Polymarket’s regulatory challenges. Back in 2022, the company reached a settlement with the CFTC regarding its provision of “event-based binary options” and remitted $1.4 million in penalties. The agreement also required the platform to restrict access for US-based users.

During 2024, federal authorities confiscated Polymarket CEO Shayne Coplan’s mobile device as part of a Department of Justice investigation concerning potential unauthorized US user activity.

The company currently carries a valuation of $15 billion and has processed billions in monthly trading volume throughout the previous year.

Consumer Lawsuit Filed in DC Court

This Friday, the National Association of Consumer Advocates initiated legal proceedings against Polymarket in the Superior Court of the District of Columbia.

The consumer protection organization claims the platform employed influencers, including Logan Paul, to reach college-age demographics through deceptive promotional content that concealed the actual probability of financial losses.

Additionally, an insider trading incident has surfaced involving the platform. Gannon Ken Van Dyke, a 38-year-old Army soldier, faces arrest for allegedly exploiting classified intelligence to wager on the ouster of Venezuelan President Nicolás Maduro, profiting more than $400,000.

The senators have requested Chairman Selig provide written answers by July 10, addressing whether the CFTC is actively investigating Polymarket, the legality of the advertisements in question, and whether the commission possesses adequate resources to oversee prediction market platforms.

The CFTC remains engaged in a jurisdictional conflict with state regulators regarding oversight authority for sports-related event contracts on prediction market platforms.

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