House Democrats Urge FTC to Investigate Prediction Market Advertising

House Democrats are calling on US regulators to investigate advertising by prediction market platforms.

Cointelegraph reported on June 3 that nine Democratic members of the US House of Representatives, including Kevin Mullin and Gabe Vasquez, sent a letter to the Federal Trade Commission asking the agency to examine whether prediction market platforms may be deceiving consumers. The lawmakers argued that the platforms promote their services to the public in ways that resemble gambling while presenting themselves to regulators as financial platforms.

The lawmakers said prediction market companies used sports-betting-style phrases such as "legal betting" in advertisements aimed at retail users. "Prediction markets are describing themselves differently to regulators and to the public," Mullin said. "These contradictory messages could cause consumers to misunderstand the rules and protections that actually apply."

The Democrats asked the FTC to respond by June 29 on whether it plans to investigate the matter or take enforcement action. They also asked whether the agency has received consumer complaints related to prediction markets and whether it reviews companies' public marketing language when determining whether consumers have been misled.

Separately, the US Congress last month opened an inquiry into whether Kalshi and Polymarket responded appropriately to allegations of insider trading.