Nine House Democrats ask FTC to probe prediction markets for consumer deception
Nine House Democrats sent a letter to the Federal Trade Commission asking it to investigate whether prediction markets mislead consumers through deceptive practices. The lawmakers, in a request dated June 4, argued that event contracts should be regulated like online sports betting and cited polling in which 70% of those surveyed agreed prediction markets were exploiting regulatory loopholes. The letter targets the sector's broader advertising conduct rather than a single platform and marks early-stage congressional scrutiny focused on consumer protection rather than commodities regulation. The request signals Democratic scrutiny of the sector beyond existing CFTC oversight and follows growing concern about insider trading in prediction markets.
Any FTC finding of deceptive advertising would subject prediction-market platforms to consent decrees and civil penalties under Section 5 of the FTC Act, separate from and parallel to CFTC commodity-market enforcement. The commission now holds two distinct complaints to weigh as it decides whether to open a formal sector-wide investigation.
The FTC probe request arrives days after the NAD referred Kalshi to the FTC over influencer- advertising violations, giving the commission two distinct prediction-market complaints to weigh as it decides whether to open a formal investigation.