Key facts
- Nine US House Democrats requested the FTC investigate prediction markets.
- Lawmakers are concerned about potential deceptive advertising practices.
- They question if platforms advertise as gambling sites to consumers but as financial tools to regulators.
- The FTC is asked about potential investigative or enforcement actions.
- Polymarket and Kalshi have faced previous scrutiny over insider trading allegations.
Nine Democratic lawmakers in the US House of Representatives have formally requested that the Federal Trade Commission (FTC) launch an investigation into prediction markets. The lawmakers, including Representatives Kevin Mullin and Gabe Vasquez, are seeking to understand how these platforms advertise to their customers in contrast to how they present themselves to regulatory bodies. Specifically, they are concerned that prediction markets might be marketed as gambling platforms to the general public while being described as financial tools offering investment products to regulators. The request also includes an inquiry into whether the FTC has any existing plans for investigative or enforcement actions against these prediction markets due to potential deceptive practices. This call for an FTC probe follows previous scrutiny of prediction markets, including an inquiry launched by Congress in May into Polymarket and Kalshi concerning allegations of insider trading on their platforms and the companies' responses to such incidents.