A group of nine Democratic members of the U.S. House of Representatives has formally requested that the Federal Trade Commission examine the operations of online prediction market platforms. The lawmakers are concerned that these companies may be presenting conflicting information to consumers and regulators, potentially leading to deceptive practices.
The inquiry, spearheaded by Representatives Kevin Mullin and Gabe Vasquez, includes signatories Jared Huffman, Raul Ruiz, Salud Carbajal, Mike Levin, Dina Titus, Paul Tonko, and Valerie Foushee. In their letter to the FTC, they highlight that prediction market platforms often advertise using terms like legal betting or betting on sports without a sportsbook, while simultaneously describing their offerings as financial contracts in regulatory filings. This duality, they argue, could confuse users about the applicable consumer protections.
Prediction markets allow participants to trade contracts based on outcomes of events ranging from elections and sports to economic data and global conflicts. The request for an FTC probe follows heightened scrutiny of platforms such as Kalshi and Polymarket, particularly regarding insider trading. Recent reports indicate that Kalshi suspended three political candidates for trading on their own election races, and federal investigators have looked into trades linked to former Representative George Santos.
The industry has seen explosive growth in 2026, with transaction volumes exceeding 191 million in March alone and monthly trading reaching approximately $23.9 billion. Much of this activity is driven by political and geopolitical event contracts, while crypto-related contracts account for a smaller share. This expansion has sparked state-level disputes, as some regulators classify sports and election contracts as gambling, while platforms seek federal recognition as financial markets.
The lawmakers have asked the FTC to respond by June 29, requesting information on any complaints received about prediction markets and whether enforcement actions are planned. They also seek clarity on whether the agency considers public advertisements, court filings, and regulatory statements when evaluating deceptive practices. The FTC has not yet announced a formal case, but the letter underscores the growing debate over whether these platforms should be treated as financial instruments, gambling outlets, or both.