US House Democrats Push for FTC Investigation Into Prediction Market Platforms

Nine Democratic lawmakers in the US House of Representatives are urging the Federal Trade Commission (FTC) to investigate whether prediction market platforms are misleading consumers through the way they advertise their services.

Representatives Kevin Mullin and Gabe Vasquez said prediction market companies appear to present themselves differently to the public than they do to regulators. According to the lawmakers, some platforms use gambling-related language in advertisements, including terms such as “legal betting” and “betting on sports without a sportsbook,” while arguing to regulators that they operate as financial markets offering investment products.

Mullin said this type of conflicting messaging could confuse consumers about the rules, protections and risks associated with these platforms. He added that the FTC should examine whether such practices may be deceptive and whether stronger consumer protections are needed.

FTC Asked to Provide Details on Potential Enforcement

In their letter, the lawmakers requested information from the FTC by June 29 regarding any planned investigations or enforcement actions involving prediction market companies. They also asked whether the agency has received consumer complaints and whether public advertising claims are considered when assessing possible deceptive business practices.

The letter was also signed by Representatives Jared Huffman, Raul Ruiz, Salud Carbajal, Mike Levin, Dina Titus, Paul Tonko and Valerie Foushee.

Prediction Markets Face Increased Scrutiny

Prediction markets allow users to trade contracts based on the outcome of future events. The industry has recently come under greater scrutiny over insider trading concerns. In May, Congress launched an inquiry into prediction market operators Polymarket and Kalshi, seeking answers about how the companies handled insider-trading incidents on their platforms.

Despite regulatory pressure, prediction markets remain one of the fastest-growing blockchain use cases. Many platforms use cryptocurrency networks and stablecoins for payments and settlements, helping drive record transaction activity earlier this year as interest in political and geopolitical event contracts continued to grow.