Two senators are calling for a federal investigation into Polymarket's social-media promotion of fake bets following The Wall Street Journal's reporting on the prediction market's deceptive marketing practices.
In a letter sent Thursday to Commodity Futures Trading Commission Chairman Michael Selig, senators John Curtis (R., Utah) and Adam Schiff (D., Calif.) said the allegations in the Journal's reporting "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," the senators wrote. "We remain concerned that the Commission is neither enforcing the law appropriately, nor is equipped to serve as a federal gambling regulator."
The letter asked Selig to disclose whether the CFTC is investigating Polymarket and whether the practices described in the Journal's investigation violate CFTC rules or federal law.
The CFTC is in the midst of a continuing investigation into Polymarket, according to a person familiar with the matter. A spokeswoman for the CFTC declined to confirm the existence of an investigation, and the subject of the inquiry couldn't be determined.
The investigation hasn't been previously reported. The commission dropped a sweeping probe into Polymarket last year.
A Polymarket spokesperson declined to comment on the letter and the investigation .
Polymarket has a data partnership with Dow Jones, the publisher of the Journal.
The Journal's investigation found that Polymarket had been paying creators to film staged trades on fake websites and hiring overseas workers to make the videos go viral in the U.S., even though Polymarket has been banned from letting U.S. users trade on its website since 2022.
The Journal reviewed 1,105 videos made by mostly college-age social-media creators, none of whom disclosed they were paid by Polymarket. In almost 10% of videos, the creators used outdated footage or altered news headlines to suggest they won a total of almost $900,000. In reality, had the bets been real, they would have lost more than $166,000. Many of the videos referred to the trades as "free money."
In response to the Journal's findings, a Polymarket spokesman previously said the company is committed to accurate and transparent markets, and that it is conducting an audit of its active promotional content.
Separately, a consumer-protection group Friday sued Polymarket, Chief Executive Shayne Coplan and Chief Marketing Officer Matthew Modabber, alleging Polymarket targeted college students with deceptive advertising, persuading them to place trades while obscuring the likelihood that they would lose money.
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," according to the suit, which also cited the Journal's reporting. "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 suit, filed in Washington, D.C., asks for unspecified monetary penalties and an end to the marketing practices described in the Journal's investigation. The suit was filed by the firm Vaca Daffan, founded by two former Federal Trade Commission attorneys, on behalf of the National Association of Consumer Advocates.
Polymarket declined to comment on the suit.
Bipartisan skepticism about prediction markets has been rising. Earlier this week, citing Journal reporting showing that most bettors on prediction markets lose money, more than a dozen Senate Democrats urged a Senate appropriations subcommittee to bar the CFTC, which has taken a relaxed approach to overseeing prediction markets, from obstructing state and tribal regulation of prediction markets.
President Trump has voiced his support for the CFTC. He posted on Truth Social that it is "critically important" that the CFTC has exclusive authority over prediction markets so that they can thrive, calling politicians who want states to regulate them "SCUM." Trump's son Donald Trump Jr. is an investor in Polymarket and a paid adviser to rival Kalshi.
Rep. James Comer, the Republican chair of the House Oversight Committee, last month launched an investigation into insider trading on Polymarket and Kalshi. Both platforms have said they ban insider trading.
This week, Polymarket and Kalshi briefed the committee on the measures they have in place to prevent insider trading on their prediction market platforms, a spokesman for the committee said, adding that the investigation is ongoing.
Write to Katherine Long at katherine.long@wsj.com, Neil Mehta at neil.mehta@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
June 26, 2026 17:22 ET (21:22 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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