Election Betting: Polymarket Probes Dozens of Suspicious Trades

Polymarket has opened investigations into dozens of election-related bets on its platform.

Shana Bautista, the company’s head of global intelligence and investigations, confirmed the scale of the probes. Her team is actively monitoring trading activity ahead of the November 3 midterms. At least two of these cases have been referred to the U.S. Commodity Futures Trading Commission, according to a person familiar with the internal processes who was not authorized to speak publicly.

The crackdown comes as prediction markets for political outcomes have grown rapidly. Polymarket and its main rival, Kalshi, have seen a surge in users. This growth has attracted scrutiny from state regulators and lawmakers. Critics argue that betting on election results poses risks to the democratic process. Polymarket’s surveillance unit consists of 16 people. They use a dedicated system to track trading patterns on both the regulated U.S. version of the site and the international version, which allows anonymous trading with cryptocurrency.

Bautista, a former FBI official who joined Polymarket in June, stated that her team reviews data from social media, the Federal Election Commission, and banking partners. The system generates hundreds of alerts daily. When specific red flags appear, Bautista receives a notification on her phone. She noted that insider trading in prediction markets mirrors tactics seen in traditional financial markets. "If you have information that you have a duty to protect, don't trade on it," she said. "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."

Competitor Kalshi launched a similar surveillance system in May. That system blocks campaign staffers listed with the FEC from betting on elections. In July, Kalshi reported blocking dozens of staffers from trading. One staffer told NPR that they managed to bypass the filter. The staffer shared trade records but spoke anonymously due to fears about their employment status. Earlier in April, Kalshi fined a small group of candidates who bet on their own campaigns. In May, NPR reported that campaign staffers had used insider polling data to profit on platforms like Polymarket and PredictIt.

Rajiv Sethi, an economics professor at Columbia University, noted that election prediction markets are vulnerable to self-fulfilling prophecies. He explained that if a candidate appears to be losing momentum, that perception can actually affect the election outcome. Polymarket’s team is analyzing specific patterns to catch manipulators. Bautista described one such tactic involving users opening multiple accounts in short bursts. She said the team looks for consistent device IDs across new wallets used in rapid succession. "We're looking at threat vectors and risk areas that have existed for decades in traditional markets," she said. "But we recognize, too, that when it comes to prediction markets, we're seeing some of the old tried and known tactics, but being applied to a new vector through prediction markets."

The CFTC has done little to directly police these new financial markets. The federal regulator has largely left the work of monitoring for manipulation to the companies themselves. Polymarket’s surveillance system pulls gigabytes of data on each user from various public and private sources. Bautista said that while crypto trades can seem anonymous, her team has rarely failed to identify the traders involved in their cases.