U.S. Senators John Curtis and Adam Schiff are pressing the Commodity Futures Trading Commission (CFTC) to investigate reports of deceptive marketing by prediction market operator Polymarket, igniting fresh regulatory scrutiny as on-chain data reveals that American traders have placed $571 million in political bets on the platform despite its official ban for U.S. users.
In a bipartisan letter, Senators Curtis (R-UT) and Schiff (D-CA) raised concerns about whether Polymarket’s promotional claims misrepresent its regulatory status or the legality of its services for U.S. residents. The platform previously settled with the CFTC in 2022, paying a $1.4 million penalty and agreeing to wind down operations for U.S. users following charges of operating an unregistered event contract market.
Now, the senators question whether Polymarket’s marketing has created a misleading impression about U.S. access or regulatory approval—a serious compliance risk given its prior enforcement history. Their intervention adds political weight to the CFTC’s ongoing efforts to reshape prediction market regulation, including new rulemaking that could redefine which event contracts are permissible.
Meanwhile, data from blockchain analytics firm Allium, reported by CoinDesk, underscores the size of the enforcement gap. Over the past year, U.S.-linked wallets accounted for $571 million in political betting volume on Polymarket—eclipsing Hong Kong’s $422 million—even though the platform blocks U.S. IP addresses. Users easily circumvent these restrictions using virtual private networks (VPNs) and cryptocurrency wallets, with 46% of U.S. political bets focused on geopolitical issues like a potential conflict with Iran, far above the platform’s overall average of 36%.
The two developments highlight a regulatory push-pull: Congress and the CFTC are increasingly scrutinizing prediction markets’ marketing and compliance, while American users continue to flock to these platforms. For Polymarket and its competitors, the immediate risk is that the CFTC could issue new guidance or enforcement actions targeting promotional practices. Any platform that previously settled with the regulator faces heightened obligations, and marketing that appears to contradict settlement terms could invite swift response.
As the prediction market sector has grown explosively since the 2024 U.S. presidential election cycle, the current scrutiny signals that both lawmakers and regulators are moving to define clearer boundaries for operations. Platforms will need to ensure their marketing aligns precisely with their actual regulatory status and geographic restrictions, or risk further enforcement.
