Lawmakers Call for Investigation into Prediction Markets

Washington, D.C. - A group of lawmakers led by U.S. Reps. Kevin Mullin (CA-15) and Gabe Vasquez (NM-02) are urging the Federal Trade Commission (FTC) to investigate whether new online prediction market platforms are engaging in unfair and deceptive practices that mislead consumers.

Internet-based prediction markets allow users to buy and sell contracts tied to the outcome of real-world events - effectively enabling a seamless way to gamble online. When two of the leading platforms began offering sports contracts in 2025, they created a billion-dollar industry in just one year. With their dramatic growth in popularity alongside major events like the World Cup and Super Bowl, the lawmakers are raising concerns that these prediction market companies advertise themselves to the public as sports gambling apps while presenting themselves to regulators as financial investment tools, misleading consumers and attempting to evade regulators.

"In a world where sports gambling has become increasingly widespread, consumers deserve clear and honest information about the platforms they are using," Rep. Mullin said. "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."

"Prediction market companies and their unregulated gambling are building a new class of billionaires and ripping off our Tribes. These companies claim they're not gambling platforms, but that's not how they advertise themselves, and their false claims shouldn't hold up in court. Regulators must close this loophole," Rep. Vasquez said.

In legal filings, Kalshi and Polymarket - the leading prediction markets - have argued that these contracts are financial tools or investment products, and therefore should not be regulated as gambling. At the same time, the companies have advertised themselves to consumers using language associated with sports gambling, including claims about "legal betting" and "betting on sports without a sportsbook." Polling shows this tactic misleads consumers, with the majority of Americans viewing it as gambling despite the fact that the companies are simultaneously attempting to evade state-based gambling regulations.

The letter requests detailed information from the FTC, including:

• Whether the FTC has taken or plans to take any investigative or enforcement actions related to prediction market platform conduct as possible unfair or deceptive acts or practices.

• Whether the FTC differentiates between the act of betting versus gambling while determining possible unfair or deceptive acts or practices.

• Whether the FTC considers public perception and legal filings of prediction market platforms when determining whether they have engaged in possible unfair or deceptive acts or practices.

• Whether the FTC received complaints about prediction market platforms.

In addition to Mullin and Vasquez, the letter was signed by U.S. Representatives Jared Huffman (CA-02), Raul Ruiz (CA-25), Salud Carbajal (CA-24), Mike Levin (CA-49), Dina Titus (NV-01), Paul Tonko (NY-20), and Valerie Foushee (NC-04). Full text of the letter can be found here.

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