Nine House Democrats have asked the Federal Trade Commission to probe whether online prediction-market platforms are misleading consumers by presenting themselves one way in public ads and another to regulators.
A bipartisan letter led by Representatives Kevin Mullin and Gabe Vasquez — also signed by Jared Huffman, Raul Ruiz, Salud Carbajal, Mike Levin, Dina Titus, Paul Tonko and Valerie Foushee — asks the FTC to determine whether prediction markets are “engaging in unfair and deceptive practices.” The lawmakers point to consumer-facing ads that borrow sports-betting language (phrases like “legal betting” and “betting on sports without a sportsbook”) while platforms reportedly tell regulators they are selling regulated financial contracts. “These prediction market companies are presenting themselves differently to regulators than they are to the public,” Mullin said, warning that mixed messaging can mislead users about which rules and protections apply.
Prediction markets let users buy and sell contracts tied to future events — from elections, sports and macroeconomic data to crypto prices and geopolitical outcomes. The platforms have grown rapidly in 2026: transactions surpassed 191 million in March, and monthly trading volume reached roughly $23.9 billion, driven largely by political, macroeconomic and geopolitical contracts. Crypto-linked contracts now make up a smaller slice of total activity on some sites.
The FTC request arrives amid existing Congressional scrutiny of major players such as Kalshi and Polymarket over potential insider trading and market integrity issues. Lawmakers have asked those firms how they verify users, block trading from restricted locations, and detect suspicious trades. Kalshi has publicly suspended three political candidates for trading on their own races, citing exchange-rule violations, and federal investigators have examined trades connected to former U.S. Rep. George Santos — incidents that amplified concerns about how platforms handle users with event-related knowledge.
State regulators and platforms are also at odds: some states view sports- and election-linked contracts as gambling products, while platforms argue they should be treated as federal financial markets. Kalshi has helped launch an industry advocacy group, Americans for Fair Markets, which seeks federal rules covering prediction markets, plus consumer protections, user checks and limits on certain event contracts.
The House Democrats requested an FTC response by June 29, asking whether the agency has received complaints, plans enforcement action, and whether it factors public ads, court filings and regulator statements into deceptive-practices reviews. The FTC has not announced a new investigation tied to the letter. Any action would add another regulatory layer to the fast-evolving debate over whether prediction markets are financial instruments, gambling products, or a hybrid of both.
Read more AI-generated news on: undefined/news
