U.S. House Democrats push FTC probe into prediction market ads

Nine House Democrats have asked the Federal Trade Commission to investigate online prediction market platforms. 

The request focuses on whether companies present themselves one way to customers and another way to regulators.

The letter was led by Representatives Kevin Mullin and Gabe Vasquez. Other signers included Jared Huffman, Raul Ruiz, Salud Carbajal, Mike Levin, Dina Titus, Paul Tonko, and Valerie Foushee.

Advertising claims draw attention

The lawmakers said some prediction market platforms use public ads linked to sports betting. They pointed to terms such as legal betting and betting on sports without a sportsbook.

At the same time, the lawmakers said these companies tell regulators they offer financial contracts. They argue that mixed messaging may confuse users about which rules and consumer protections apply.

“These prediction market companies are presenting themselves differently to regulators than they are to the public,” Mullin said. He added that such messaging can mislead consumers about the rules in place.

Kalshi and Polymarket face wider review

Prediction markets let users buy and sell contracts tied to future events. These events can include elections, sports, economic data, crypto prices, and global conflicts.

The FTC request comes as Congress has already examined Kalshi and Polymarket over insider-trading concerns. Lawmakers have asked how the companies check users, block restricted locations, and watch suspicious trading.

As previously reported by crypto.news, Kalshi suspended three political candidates after finding that they traded on their own election races. Kalshi treated the cases as violations of exchange rules.

Federal investigators examined trades linked to former U.S. Representative George Santos, as crypto.news reported. The case added fresh attention to how platforms handle users with direct knowledge of an event.

Growth brings more regulatory pressure

Prediction markets have grown quickly in 2026. crypto.news previously reported that transactions crossed 191 million in March, while monthly trading volume reached about $23.9 billion.

Much of that growth came from political, macroeconomic, and geopolitical event contracts. Crypto-related contracts now represent a smaller share of total activity on some platforms.

That growth has also brought state-level disputes. Some regulators argue that sports and election-linked contracts look like gambling products, while platforms seek federal treatment under financial market rules.

Kalshi has supported a new advocacy group called Americans for Fair Markets. The group plans to push for federal prediction market rules, consumer protections, user checks, and limits on certain event contracts.

FTC response is due by June 29

The House Democrats asked the FTC to respond by June 29. They want to know whether the agency has received complaints about prediction markets and whether it plans any enforcement action.

They also asked whether the FTC considers public ads, court filings, and regulator statements when reviewing possible deceptive practices. The request places consumer messaging at the center of the prediction market debate.

The FTC has not announced a new case tied to the letter. Any review would add another layer to the growing policy fight over whether prediction markets are financial products, gambling platforms, or both.