The CFTC is reportedly investigating Polymarket in connection with a broader federal review. The inquiry is not an enforcement action; Polymarket previously said it was auditing its promotional content, while lawmakers have called for scrutiny of alleged misleading marketing.
The inquiry could bring regulatory scrutiny of Polymarket’s marketing and promotional disclosures.
The day’s most important stories, free. One email a day.
Nevada senator Catherine Cortez Masto said sports prediction markets constitute gambling and criticised a CFTC directive on access to federally regulated exchanges. The directive gave exchanges 30 days to comply or explain why they could not, a requirement that the coverage says complicates operators’ responses to state court orders.
Federally regulated exchanges have 30 days to lift restrictions based on traders’ residence within the United States or explain why they cannot, under an order issued last week by the CFTC. The order added compliance difficulties for prediction market operators facing court-ordered access limits in states including Michigan, Nevada and Washington.
The CFTC said on 5 November that registered designated contract markets must remove domestic geographic restrictions that conflict with its fair-access requirements within 30 days. Exchanges must also ensure partner intermediaries comply, or explain in writing why they cannot; the guidance comes amid state court orders requiring restrictions in several states.
The CFTC said on 5 November that registered prediction market operators must unblock geoblocked states within 30 days. Under its new interpretative guidance, designated contract markets that cannot comply may instead explain in writing why they cannot.
US senators Elizabeth Warren and John Curtis asked Kalshi and Polymarket for details of safeguards against insider trading and manipulation on election-related prediction markets. Their bipartisan letter also sought information about previous enforcement actions and suspected violations of Commodity Futures Trading Commission rules. The senators cited concerns about candidate trading and alleged manipulation, including cases involving Kalshi and Polymarket.
The CFTC submitted two proposals to the White House on 28 September that would revise how event contracts are classified in the United States. One would define them as swaps and go to public consultation; the other would exclude casino-style gambling products and is interim final. Chairman Michael Selig said the swap classification would secure federal exclusivity for the agency.
The CFTC submitted two proposed rules to the White House Office of Management and Budget to clarify federal oversight of prediction markets. One would exclude casino-style gambling from the swap definition and could take effect soon after Federal Register publication; the other would classify event contracts as swaps and follow a public comment process.