Prediction market company Polymarket says it is fully prepared to police trading on its platform during the approaching U.S. midterm elections.
Lawmakers worried that prediction markets could be used to manipulate confidence in election outcomes will have a test case in the upcoming US midterms, scheduled to be held, in large part, on November 3. With the elections set to test the industry’s controls, the company’s new global head of investigations and intelligence told Reuters that its surveillance systems are prepared for it.
US lawmakers have raised concerns that the rapid growth of prediction markets could open new channels for insider trading and pose risks to national security and election integrity, including the possibility of undermining confidence in candidates and election officials or casting doubt on race outcomes. Several states are separately pursuing legal action to remove prediction markets from sports betting.
Against that backdrop, Polymarket’s global head of investigations and intelligence, Shana Bautista, said the company has built the infrastructure to catch irregular trading before and during the midterm cycle.
“I’m confident that I’m able to get the resources and the support I need,” Bautista told Reuters. “I can tell you that we have the systems in place to be able to identify anomalous activity when the midterms do come.”
Blockchain data as an oversight tool
Central to the political debate is the structure of Polymarket’s international platform, which settles trades on a blockchain. That design makes wagers publicly visible while keeping individual traders anonymous, a setup critics argue creates conditions for misconduct.
Bautista pushed back on that characterization, saying the same public ledger gives the company valuable data to track trading behavior and flag suspicious patterns.
Founded in 2020, Polymarket has been expanding its internal controls in response to the mounting political scrutiny. The company plans to launch a webpage detailing how it protects market integrity and cooperates with law enforcement.
Bautista said the page will outline the company’s use of machine learning, blockchain analytics, trade surveillance, open-source research and third-party partnerships to identify and stop malicious activity.
“The market integrity program itself is not new, but what we’re putting on the record now is considerably more detail about how it operates,” she said.
Evidence cited to address lawmaker concerns
To support its case, Polymarket points to more than 100 cases the company says it has referred to law enforcement. Bautista cited a wallet linked to a US soldier accused by prosecutors of using classified information to bet on the capture of Venezuela’s Nicolas Maduro, along with a number of suspected insider bets tied to US military action in Iran.
The company also faces continued questions over whether it is complying with a 2022 settlement requiring it to bar US users from its international platform. The Commodity Futures Trading Commission fined Polymarket that year for operating without registering with the agency.
Some analysts have said evidence suggests US users continue to access the platform despite the restriction, a gap that lawmakers could point to as a broader compliance concern heading into the midterms.
Bautista said she believes the company’s systems block the large majority of US users. “It is difficult at scale to be able to consistently and always evade all of the guardrails we have,” she said. “I do not see it being a really prevalent issue.”
Political climate adds another layer
The regulatory environment surrounding Polymarket has shifted since the 2022 settlement. Under the Trump administration, which has taken a more favorable stance toward prediction markets, federal regulators dropped an investigation into whether Polymarket had violated the terms of that agreement.
CEO Shayne Coplan said at the time that the company had been cleared of wrongdoing. Polymarket returned to the US market last year through the acquisition of a US-registered exchange, a move that placed the company’s compliance practices under renewed attention just as election-related concerns intensify.