Polymarket pledges to police trading ahead of 2026 midterm elections

Polymarket's investigations head Shauna Bautista told Reuters on Monday the platform is stepping up enforcement to keep US users off its international venue ahead of the November midterms, as regulators intensify scrutiny of political betting.

"We are focused on ensuring that US users are not able to access trading on our international platform," Bautista said in the interview published Aug. 31. The pledge follows a wave of enforcement actions across the prediction market sector.

Kalshi, a CFTC-regulated rival operating as a Designated Contract Market, issued its first-ever lifetime ban on former Rep. George Santos after concluding he likely engaged in insider trading, turning a $17,839 profit on contracts tied to a potential State of the Union appearance. The platform also suspended Republican House nominee Laurie Buckhout for three years after she admitted to betting less than $1,000 on her own campaign in North Carolina's 1st Congressional District.

The Commodity Futures Trading Commission has been actively investigating political betting activity, having already settled with Santos for $17,500. Kalshi's head of enforcement, Bobby DeNault, said most traders under investigation cooperated, but Santos did not, leading to harsher repercussions. Kalshi earlier this year suspended three minor political candidates for similar violations.

Enforcement diverges across platforms

Kalshi operates under federal CFTC oversight as a Designated Contract Market, making it legal across most of the US, though some states have restricted access. Polymarket, by contrast, operates internationally and has faced regulatory questions about US user access. The platform's pledge to police trading comes as campaign operatives warn candidates not to trust prediction market data, with some arguing the markets are vulnerable to manipulation by insiders.

Buckhout, who received an endorsement from former President Donald Trump and was included in the National Republican Congressional Committee's "MAGA Majority" program, called her wager a "dumb mistake." Democrats seized on the incident, with DCCC spokeswoman Madison Andrus questioning whether Buckhout "can be trusted as an ethical representative for North Carolina families."

The enforcement push could reduce US participation and liquidity on prediction platforms, potentially affecting odds accuracy as the midterm season takes shape. With more than $73 million already traded on Kalshi's NFL Champion 2027 market alone, prediction markets have become a significant venue for political and sports speculation. Santos, expelled from Congress in 2023 and later imprisoned for unrelated fraud charges before receiving a Trump commutation, questioned the platform's longevity on social media following the ban.

The regulatory environment for prediction markets remains in flux. The CFTC has been examining how platforms handle insider information, and the agency's settlement with Santos set a precedent for enforcement against political betting violations. Meanwhile, platforms like Polymarket and Kalshi face different compliance burdens — Kalshi must meet DCM obligations under federal commodities law, while Polymarket's international structure creates jurisdictional questions about US user access.

As campaigns ramp up for the November midterms, the fallout from these cases serves as a reminder of the potential for conflicts of interest in an era where prediction markets are gaining prominence in both politics and finance. The platforms' enforcement efforts will be tested as election day approaches and trading volumes on political contracts are expected to surge.

This article is for informational purposes only and does not constitute investment advice.