Topline
Polymarket is under federal investigation, according to two reports citing sources familiar with the matter, revealing a probe the same week two senators demanded the agency open one over a Wall Street Journal investigation into the company’s social media promotion of fabricated betting wins.
Key Facts
The Commodity Futures Trading Commission has an ongoing investigation into the online betting market, according to reports published in the Wall Street Journal and CNBC, though the agency has not confirmed the probe publicly.
Last week, the Journal published an investigation on Polymarket’s deceptive marketing practices wherein mainly college-age online content creators posted videos of themselves winning fake bets on the app.
Senators John Curtis (R., Utah) and Adam Schiff (D., Calif.) said in a letter sent Thursday to CFTC chairman Michael Selig the conduct revealed in the Journal’s investigation was “deeply troubling” and warned the agency may be ill-equipped to police what increasingly looks like gambling.
The investigation would be the first high-profile enforcement action against a prediction market under Selig, who has been an aggressive champion of these markets.
In July 2025, the federal agency and the Justice Department abruptly dropped an earlier investigation, launched during the Biden administration, into Polymarket’s breach of a prior agreement barring U.S. users from its prediction market.
Separately, a consumer advocacy group sued Polymarket, CEO Shayne Coplan and CMO Matthew Modabber on Friday, alleging they used “many layers of manipulation” to aim deceptive ads at college students.
A CFTC spokesperson declined to comment, and Polymarket did not immediately respond to Forbes’ requests for comment.
crucial quote
“The public-facing behavior alleged here does not resemble a sober financial market designed for hedging or price discovery,” Curtis and Schiff wrote in the letter.
key background
Polymarket was barred from serving U.S. users in 2022 after federal regulators found it had failed to properly register its markets. The scrutiny escalated sharply after the 2024 election, when prediction markets surged in popularity as users correctly favored Trump’s win. In November 2024, FBI agents raided Polymarket founder and CEO Shayne Coplan’s Manhattan apartment and seized his phone and electronics as part of a criminal investigation into whether Polymarket had let U.S. users trade in breach of its settlement. Shortly after, Coplan posted on his X account that he saw the raid as a “last-ditch effort” from the Biden administration “to go after companies they deem to be associated with political opponents.” That probe, run jointly by the CFTC and Justice Department, was dropped without charges in July 2025, and Polymarket received the regulatory greenlight to operate in the U.S. in the months after. The Trump administration has staunchly supported prediction markets and its federal regulation despite a flurry of controversies surrounding these markets regarding insider trading, market manipulation and its legal classification as gambling.
forbes valuation
Coplan briefly held the title of world’s youngest self-made billionaire at age 27 last October when the New York Stock Exchange parent company invested $2 billion in Polymarket, giving the company a $9 billion valuation. Polymarket’s chief rival Kalshi also minted billion-dollar fortunes for its founders shortly after when the company raised $1 billion at an $11 billion valuation in December. Kalshi cofounder Luana Lopes Lara claimed the title of youngest self-made woman billionaire.
tangent
Donald Trump Jr. is an investor in Polymarket and a paid adviser to its chief rival, Kalshi. The president’s son had a $300,000 equity stake in Kalshi before the startup reached its $2 billion valuation in June 2025, according to the Financial Times. Kalshi is now valued at $22 billion thanks to a billion dollar funding round in May and is eyeing a fresh round at a $40 billion valuation, per the Times.
