Politics
Polymarket says it has examined dozens of bets tied to 2026 midterms
Polymarket says it has investigated dozens of election-related bets and referred at least two cases to federal regulators. The company has expanded surveillance as concerns grow that campaign insiders could exploit confidential information or influence markets tied to elections.
Polymarket has investigated dozens of bets related to the Nov. 3 midterm elections, the prediction-market company’s head of global intelligence and investigations said, as the fast-growing industry faces scrutiny over insider trading and potential effects on democratic processes.
At least two of the investigations were referred to the U.S. Commodity Futures Trading Commission, according to a person familiar with the probes who was not authorized to speak publicly. The CFTC regulates the markets.
Shana Bautista, a former FBI official who joined Polymarket in June, oversees a 16-person team and a new system monitoring election-related trading. She said the system draws on information including social media, Federal Election Commission records, data from cryptocurrency companies and banking partners, statistical models and other public sources. It generates hundreds of alerts a day, she said.
Polymarket bars users from trading on confidential information they have a duty to protect, Bautista said. The company operates a U.S.-regulated platform that requires users to verify their identities, as well as a larger international platform where users can trade anonymously with cryptocurrency. Bautista said crypto transactions are rarely entirely anonymous and that investigators have been able to identify potential suspects in the cases they examine.
The company has not publicly detailed the cases or its criteria for flagging trades. Bautista said the system looks for patterns such as multiple accounts placing trades in quick succession using devices or new crypto wallets that appear connected.
Prediction markets have grown sharply in popularity, alongside competitor Kalshi, but the companies’ own monitoring efforts have not resolved broader questions about oversight. The CFTC has largely left enforcement to the platforms, even as states challenge the industry’s legal standing and lawmakers raise concerns about election betting.
Kalshi said earlier this year that it had blocked dozens of campaign staffers from trading on elections. A campaign staffer later told NPR they had found a way around the restrictions. In April, Kalshi also banned and fined several political candidates for betting on their own campaigns.
Rajiv Sethi, an economics professor at Barnard College who studies prediction markets, said election markets carry a particular risk: beliefs about a candidate’s prospects can shape voter perceptions and campaign momentum. That creates the possibility that trading intended to predict an outcome could also help influence it.