Polymarket Probes Dozens of Midterm Bets, Refers Two Cases to CFTC
Polymarket's investigations chief Shana Bautista told NPR the platform has probed dozens of midterm election bets, with at least two cases referred to the CFTC, as its surveillance system flags hundreds of alerts a day ahead of the Nov. 3 vote.
Polymarket has investigated "dozens" of bets on its midterm election markets for possible insider trading and manipulation, and at least two cases have gone to the Commodity Futures Trading Commission, according to an NPR investigation published Oct. 27.
Shana Bautista, Polymarket's head of global intelligence and investigations, described the probes to NPR. The two CFTC referrals were reported by NPR citing a person familiar with the investigations.
Bautista is a former FBI official and crypto analyst who joined the company in June and leads a team of 16. Her team monitors both Polymarket's identity-verified U.S. exchange and Polymarket International, where users can trade anonymously with crypto. The surveillance system draws on social media, FEC filings, crypto companies, banking partners and statistical models. It generates "hundreds of alerts a day," she said, though she declined to share the specific criteria, citing system security.
"If you have information that you have a duty to protect, don't trade on it. It's explicitly against our terms of use on both platforms, but also is against the law. If you decide that you are smarter and can do it, we will find you."
Shana Bautista, head of global intelligence and investigations at Polymarket
Bautista also said there has "never been a case that we work where we haven't been able to identify, potentially, who these people are." Typical warning signs include concentrated bursts of trading, multiple accounts behaving similarly and shared device identifiers.
The stakes are rising with the midterms set for Nov. 3. Polymarket lists 506 election markets, including $24 million in House bets and $9 million in Senate bets. As of Oct. 27, Democrats were priced at 92% to win the House and roughly 66% for the Senate. Combined midterm trading across Polymarket and Kalshi had reportedly topped $220 million by mid-October.
The regulatory backdrop is thin. NPR reported that the CFTC has done little to police prediction markets, largely leaving the job to the companies. In September, CFTC staff warned that "mention markets" should be presumed readily susceptible to manipulation. Economist Rajiv Sethi told NPR that election markets can become self-fulfilling: in thinly traded contests, modest trades can move prices and, in turn, influence fundraising, media narratives and voter perceptions.
Competitors are doing similar work. Kalshi launched an FEC-based system in May to block campaign staffers from betting, and said in June it had opened more than 150 investigations that year and referred more than 20 cases to law enforcement. One campaign staffer told NPR they had found a way around Kalshi's block.
Polymarket's enforcement push follows a string of incidents. Its Chainalysis surveillance partnership came in April, days after an active-duty U.S. Army soldier was charged with betting on classified information about the raid to capture Nicolás Maduro. In May, campaign staffers told NPR they had made "thousands" betting on their own candidates using tips about unreleased polls, in earlier NPR reporting.
Pressure from other institutions is building as well. The Pentagon barred personnel from trading on nonpublic data on prediction markets, and the NBA signed an information-sharing MOU with the CFTC. With the federal regulator largely leaving enforcement to the platforms, as NPR reported, internal surveillance and referrals like Polymarket's are carrying much of the load in election contracts.
