Polymarket Sued Over Fake Bets and Campus Marketing as CFTC and Senators Circle

The National Association of Consumer Advocates (NACA) sued Polymarket in the Superior Court of the District of Columbia on June 26, accusing the prediction market of a "pattern of flagrantly deceptive and unfair marketing" that lured Americans into placing real-money bets while obscuring how likely they were to lose. The complaint names CEO Shayne Coplan and Chief Marketing Officer Matthew Modabber as defendants, on the basis that the two hold "ultimate decision-making authority" over the company's marketing. It brings three counts under the D.C. Consumer Protection Procedures Act: deceptive marketing of the platform, deceptive failure to disclose paid relationships, and unfair promotion of a gambling product to college-age Americans. NACA wants a jury trial, a declaratory judgment that the conduct violates the statute, and equitable relief including restitution, disgorgement of profits and a permanent injunction.

The suit tracks a Wall Street Journal investigation that examined how the brand built its social-media reach. The central allegation is staged wagers: Polymarket allegedly built near-exact copies of its own website and told paid creators to film themselves "betting" on the replicas without disclosing they were compensated. The Journal reviewed 1,105 videos from 10 creators posted between December 2025 and mid-May, found a bet on screen in roughly 70% of them, and reported that none of the wagers, worth about $1.9 million, were real. About one in four of those videos used the word "free." The 10 creators collected roughly $900,000 from the bets shown across 118 videos, with some paid $2,000 to $3,000 a month. Modabber allegedly routed at least $350,000 through his personal PayPal account to a group of content creators over 13 months.

Named endorsers, clipping and fraternities

The complaint puts names and dollar figures on the influencer spend. Political activist Riley Gaines was allegedly paid at least $6,000 to share a post about Polymarket's DOGE job-cut tracker to her more than 1 million followers on X, without on-screen wagering; commentator Brian Krassenstein allegedly received about $9,300. NACA also targets "clipping," in which short ad cuts are seeded across fresh accounts built to look organic, with clippers paid roughly $1 per 1,000 views. It cites a Journal example of a video that drew 151 views on its own and reached 2.4 million after a clipping push. The campus allegations are the sharpest for a consumer-protection theory built around minors and young adults. Polymarket allegedly worked with an agency, CampusGTM, to recruit students who earned $500 to $2,000 per campaign, and offered fraternities direct kickbacks for sign-ups. It reportedly invited Columbia University's Sigma Phi Epsilon chapter to its New York headquarters, where about 20 members got $10 each to use on the platform. That chapter allegedly pocketed $30,510 in two weeks after launching a sign-up deal, with some of the money spent on a party.

The legal action is one of three pressure points landing in the same week. A CFTC probe described as "ongoing and extensive" is examining Polymarket's operations, and the company says it is running "a comprehensive audit of active promotional content." Senators John Curtis (R-Utah) and Adam Schiff (D-Calif.) wrote to CFTC Chairman Michael Selig questioning the agency's grip on prediction markets, while Senator Richard Blumenthal said Polymarket is "flagrantly violating federal law." A separate group of Democratic senators asked an appropriations subcommittee to bar the CFTC from spending federal funds to sue states over prediction-market enforcement.

Why the scale and the precedent matter

The marketing fight arrives as Polymarket has become one of the most heavily capitalized firms in the sector. Platform volume reached about $51 billion in 2025, revenue surpassed $1 billion, and the company raised at roughly a $15 billion valuation after Intercontinental Exchange, owner of the New York Stock Exchange, committed up to $2 billion across investments that began at a $9 billion mark in October 2025. Polymarket re-entered the US market only in 2026, after a 2022 exit and a $1.4 million CFTC civil penalty for failing to register as a designated contract market. Bernstein has projected total prediction-market volume could reach $240 billion in 2026, about 3.7 times the 2025 figure, which is the backdrop a deceptive-marketing finding would touch.

There is a precedent with a known outcome. In October 2016, DraftKings and FanDuel settled deceptive-advertising claims with then-New York Attorney General Eric Schneiderman for $6 million each, $12 million in total, after the state alleged the daily-fantasy operators gave novices false statistics on their odds of winning. The settlement forced both to publish player success rates, including the share of winnings captured by the top 1%, 5% and 10% of users. The relief NACA seeks, restitution plus an injunction, points at the same remedy: disclosure that breaks the "easy money" framing.

For affiliates and B2B partners, the exposure is direct. The complaint targets the exact mechanics the affiliate economy runs on: paid endorsements presented as organic content, clipping farms, and per-sign-up kickbacks. A finding that undisclosed paid promotion violates a state consumer-protection statute would set a template other attorneys general can copy, and the prediction-market vertical already faces multiplying state actions, from Kentucky's suits against Kalshi, Polymarket and VGW to the contested enforcement record across courts. The same week's regulatory pile-on shows the venues that lack responsible-gambling safeguards are now the consumer-protection target rather than only a tax target. Polymarket had not responded to a request for comment when the suit was reported. Separately, a District Court judge denied Polymarket a preliminary injunction in its preemptive case against Michigan officials, finding it had not shown immediate irreparable harm, part of a widening split among courts over whether sports event contracts are betting.