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Polymarket is facing increased regulatory attention after reports alleged that the prediction market platform used misleading influencer campaigns to promote its services. At the same time, the company recorded strong trading activity during the 2026 FIFA World Cup placing the platform at the center of both regulatory discussions and growing market interest.
A Wall Street Journal investigation reported that Polymarket allegedly paid college-age content creators to publish more than 1,100 promotional videos between December 2025 and May 2026. The report stated that the videos featured fabricated prediction market trades worth about $1.9 million using replica versions of the Polymarket website instead of the real platform.
According to the report, creators allegedly displayed fake profits of nearly $900,000 while concealing their financial relationship with the company. The investigation also claimed the staged content gave viewers the impression that large profits were common while hiding potential losses that could have exceeded $166,000.
The report further stated that creators were instructed to use imitation websites that closely resembled the official Polymarket interface. It also alleged they were told not to disclose payments connected to the promotional campaigns, making sponsored content appear as ordinary social media posts.
Following the publication of the investigation, Polymarket launched an internal review of its promotional activities. The company has not publicly released the findings of that review.
Regulatory attention increased after US Senators John Curtis and Adam Schiff sent a letter on June 26 asking the Commodity Futures Trading Commission (CFTC) to investigate Polymarket's advertising practices. The request followed the Wall Street Journal investigation and focused on whether promotional campaigns complied with advertising rules.
Polymarket already has a history with the CFTC. In 2022, the company reached a settlement with the regulator that included a $1.4 million civil penalty. As part of that agreement, the platform stopped offering services to US users.
The legal pressure has expanded beyond regulators. A consumer advocacy group filed a lawsuit against Polymarket and several executives in late June, alleging deceptive advertising practices that targeted college students. Meanwhile, reports indicated that federal authorities were also examining the company's marketing activities.
The Wall Street Journal investigation quoted concerns that replica websites and staged betting results could influence new users. However, Polymarket has not publicly confirmed the allegations and its internal review remains ongoing.
While regulatory attention increased, prediction markets recorded strong trading activity during the 2026 FIFA World Cup. DefiLlama data showed Kalshi generated nearly $9.4 billion in June trading volume, compared with about $5.3 billion in May. During the same period, Polymarket International increased monthly volume to roughly $4.3 billion from approximately $3.5 billion.
Separate market data showed even stronger monthly figures. Kalshi reportedly exceeded $30 billion in June notional trading volume, while Polymarket International reached more than $10.8 billion. Polymarket's US platform also recorded more than $3.5 billion in monthly volume.
Knockout-stage matches attracted heavy participation across both platforms. Canada's Round of 16 match against Morocco generated more than $48 million in trading volume on Kalshi and over $26.8 million on Polymarket. Markets involving the United States also attracted millions of dollars in trading activity.
The rapid growth has coincided with broader regulatory discussions surrounding prediction markets. Nearly a dozen US states have taken action involving platforms such as Kalshi and Polymarket, while European regulators have also reminded firms that some event contracts may already fall under existing financial rules.
During the regulatory debate, CFTC Chair Michael Selig criticized state enforcement efforts, stating, “To any state that seeks to nullify federal law and seize authority over these markets, we will see you in court.”
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