SouthernWorldwide.com – Polymarket has announced an internal review of its advertising materials following a report from The Wall Street Journal that alleges deceptive marketing practices.
The Wall Street Journal’s investigation, published on Saturday, revealed that the prediction market allegedly compensated online content creators for producing videos. These videos, according to the report, falsely depicted customers winning a total of $1.9 million.
The findings are based on interviews with social media creators and an analysis of over 1,100 TikTok videos from 10 individuals. The Journal reported that most of these videos showcased simulated trades on dummy websites designed to mimic Polymarket’s platform.
The newspaper suggested that these actions were part of a strategy to attract users to Polymarket’s offshore, unregulated platform. Furthermore, the investigation indicated that Polymarket hired a marketing contractor to instruct “clippers”—individuals who repost content from creators to expand its reach—to share these videos.
One particular social media video highlighted by the WSJ showed a college student supposedly winning $100,000 from a $1,000 bet. The bet was contingent on President Trump saying the word “McDonald’s” publicly within that month. However, the actual trading record on Polymarket’s website indicated that 50 accounts had placed bets on this outcome, and all of them lost.
The Wall Street Journal’s report also pointed out other instances where earnings from parallel bets were misrepresented. Approximately 10% of the analyzed videos, totaling 118, depicted creators winning nearly $900,000. In reality, the report stated that if identical bets had been placed, these creators would have lost over $166,000.
In response, a Polymarket spokesperson stated to CBS News that the company is committed to maintaining accurate, fair, and transparent markets. They acknowledged being part of a rapidly growing industry and are continuously seeking ways to improve user engagement and build trust.
The spokesperson further elaborated that Polymarket is undertaking a comprehensive audit of its active promotional content. This audit aims to ensure compliance with the company’s standards, as well as all applicable regulatory and legal disclosure requirements.
Existing Scrutiny on Polymarket
Polymarket, like other prediction markets, allows users to wager on the outcomes of various future events, including sports, elections, and weather patterns.
In recent months, the company has been under scrutiny due to allegations of insider trading. In May, federal prosecutors accused a Google employee of profiting over $1.2 million on Polymarket by using confidential business information.
Earlier this year, a data analyst informed “60 Minutes” that they had observed other cases where Polymarket accounts had amassed millions by correctly predicting outcomes related to U.S. military operations. These instances sometimes involved a suspiciously high win rate.
Polymarket maintains that insider trading is prohibited on its platform. The company updated its rules in March to explicitly forbid trades based on “stolen confidential information” or illegal tips.
Regulators had previously banned Polymarket from operating in the U.S. in 2022. This action followed allegations that the company was operating an unregistered options exchange.
Last year, the Commodity Futures Trading Commission (CFTC), the agency overseeing prediction markets, granted Polymarket permission to launch a U.S.-regulated platform. However, this service is reportedly invite-only and exclusively accessible via iPhone, according to sources.
Consequently, a significant portion of Polymarket’s trading volume continues to be concentrated in its overseas markets.
According to the Federal Trade Commission, federal law mandates that advertisements must be truthful, not misleading, and, where appropriate, supported by scientific evidence.
An FTC spokesperson declined to comment on whether the agency intends to investigate Polymarket in light of The Wall Street Journal’s findings.
