Key Highlights
- Senators John Curtis and Adam Schiff sent a bipartisan letter to CFTC Chairman Michael Selig.
- The lawmakers cited reports alleging Polymarket used deceptive influencer marketing to promote prediction markets.
- They questioned whether prediction markets are functioning more like gambling than financial derivatives.
A bipartisan group of U.S. senators has escalated scrutiny of prediction market platform Polymarket, pressing the Commodity Futures Trading Commission (CFTC) to explain how it is overseeing the rapidly growing industry following allegations of deceptive marketing practices and influencer campaign aimed at American users
In a letter sent to CFTC Chairman Michael S. Selig, Senators John Curtis (R-Utah) and Adam Schiff (D-Calif.) requested detailed information about reports that Polymarket used undisclosed influencer campaigns and simulated trading content to promote prediction market products to U.S. audiences.
The lawmakers argued that the allegations reinforce broader concerns that prediction markets increasingly resemble online gambling rather than legitimate financial products.
Senators question prediction markets’ regulatory status
Curtis and Schiff said the CFTC has consistently asserted regulatory authority over prediction markets through its oversight of event contracts, but argued that current practices blur the distinction between regulated derivatives and gambling.
“The CFTC has repeatedly asserted regulatory authority over prediction markets and event contracts… Yet with content creators routinely portraying prediction markets as ‘free money,’ there is little basis for treating them differently from gambling.”
The senators further argued that the contracts “are not in the public interest” and questioned whether the CFTC is adequately enforcing existing laws or effectively acting as a federal gambling regulator.
Senators question federal oversight
The lawmakers’ letter follows a recent Wall Street Journal investigation alleging that Polymarket ran a social media marketing campaign in which paid influencers promoted simulated trades and inflated profit claims through websites designed to resemble the platform.
According to the report, many creators allegedly failed to disclose they were being paid, while the campaign generated millions of views despite Polymarket’s core platform remaining inaccessible to U.S. users.
Although Polymarket later said it would review its promotional practices, Senators Curtis and Schiff argued the allegations raise broader concerns about whether prediction market platforms are operating without the consumer safeguards applied to licensed gambling operators.
“Prediction market operators should not be permitted to avoid those obligations by rebranding gambling products as federally regulated financial contracts,” the senators wrote.
The lawmakers also warned that prediction markets currently operate without many of the protections required of traditional gaming operators, including licensing standards, responsible gambling measures, advertising rules, integrity monitoring, and age verification requirements.
Polymarket’s U.S. expansion faces fresh scrutiny
The inquiry comes as Polymarket seeks to re-enter the U.S. market under a regulated framework. Earlier this year, the platform announced plans to pursue CFTC approval to legally offer event contracts to American users, marking a shift from its offshore-only model after settling with the regulator in 2022.
However, the latest congressional scrutiny could add pressure to the CFTC’s oversight of prediction markets. The senators argue regulators should first determine whether these products serve legitimate financial purposes or simply function as gambling contracts under a different label.
Senators seek answers on CFTC oversight
The lawmakers requested the CFTC respond by July 10, 2026, seeking clarification on several issues, including:
- Whether the agency is investigating the conduct described in the Wall Street Journal report.
- What actions have been taken since the CFTC’s 2022 enforcement action against Polymarket to prevent the platform from targeting U.S. users.
- Whether simulated trades or fake websites can legally be used in promotional materials.
- What consumer protection standards govern prediction market advertising, influencer promotions, age verification, and responsible gaming safeguards.
- Whether the CFTC intends to preserve state and tribal authority over sports betting and casino-style gaming products offered as event contracts.
Regulatory pressure on prediction markets builds
The letter adds to growing political scrutiny surrounding prediction markets as platforms such as Polymarket and Kalshi continue expanding into elections, sports, economics, and real-world event contracts.
Curtis and Schiff have previously introduced legislation aimed at banning sports prediction markets and preventing federal officials from using non-public information to trade prediction market contracts.
The latest inquiry suggests Congress is increasingly focused on whether prediction markets should continue operating under the CFTC’s derivatives framework or face regulations similar to traditional gambling operators.
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