House Democrats ask FTC to probe prediction market ads

Nine House Democrats led by Representatives Kevin Mullin and Gabe Vasquez asked the Federal Trade Commission on Wednesday to open a probe into how online prediction market platforms present themselves to customers versus regulators.

In a letter to the FTC, the lawmakers requested detailed information by June 29 on whether the agency plans investigative or enforcement action against prediction market companies for possible deceptive practices. They also asked whether the FTC has received complaints about these platforms and whether it considers public perception and court filings when deciding if a company has engaged in deceptive activity.

The lawmakers allege some platforms use language associated with sports gambling, including terms such as legal betting and betting on sports without a sportsbook, while telling regulators they operate as financial products and investment tools. They say the differing messages could confuse consumers about which rules and protections apply when people place real-money bets or trades on future events.

Prediction markets let users buy and sell contracts tied to the outcome of future events, including elections and economic indicators. Some platforms settle trades using cryptocurrency rails and stablecoins. Trading volumes in the sector rose in March, reaching record highs as interest in political and geopolitical event contracts increased.

Congressional and regulatory scrutiny of the sector has grown. In May, lawmakers opened a separate probe into companies including Polymarket and Kalshi over reported insider-trading incidents. Kalshi has barred several U.S. politicians from wagering on their own election races.

The letter was signed by Mullin, Vasquez and Representatives Jared Huffman, Raul Ruiz, Salud Carbajal, Mike Levin, Dina Titus, Paul Tonko and Valerie Foushee. In the letter the lawmakers wrote, “These prediction market companies are presenting themselves differently to regulators than they are to the public, and that kind of contradictory messaging can mislead consumers about what rules and protections actually apply. We are urging the FTC to investigate these practices and ensure consumers are protected from this potentially deceptive activity.”

The lawmakers asked for the FTC’s response and any related records by June 29 so they can decide whether further congressional or regulatory action is needed.