Throughout 2025, while Kalshi, Robinhood, and other companies offering prediction-market platforms dealt with a litany of lawsuits, Polymarket was able to quietly prepare its U.S. app while staying out of the legal fray.
Things have changed. Not long after it launched its U.S. app in December, Polymarket was sued by the Nevada Gaming Control Board. It currently faces at least half a dozen lawsuits in the U.S., including cases from state regulators in Wisconsin and Rhode Island, as well as a new suit brought Friday by a nonprofit called the National Association of Consumer Advocates.
Meanwhile, Polymarket’s international platform—which users in the U.S. are not supposed to be allowed to access—has produced two high-profile cases. In April, a U.S. soldier was indicted by the U.S. Department of Justice for allegedly using inside information to make more than $400,000 trading on when the military would capture Venezuelan President Nicolás Maduro. A month later, the DOJ indicted a Google software engineer for allegedly using confidential internal information to make more than $1.2 million on Polymarket by betting on markets related to who the most-searched person of 2025 would be.
Many of the lawsuits filed against platforms have centered on sports event contracts, which are regulated at the federal level by the Commodity Futures Trading Commission. The argument is that such markets are just sports betting in disguise, and they should be regulated on a state-by-state basis, which is the framework for traditional sports betting.
The new NACA lawsuit, however, is not about sports event contracts. The suit, filed in the Superior Court of the District of Columbia, claims Polymarket has engaged in a “sweeping deceptive marketing campaign that lures Americans, and unfairly targets college-aged individuals and students, into gambling real money while obscuring how likely bettors are to lose.”
It names Polymarket, the company’s founder and CEO Shayne Coplan, and CMO Matthew Modabber as defendants, and lumps Polymarket’s U.S. app and international platform together, saying they are “operated as a common enterprise while engaging in the deceptive and unfair acts and practices alleged in this complaint.”
The suit cites a recent report from the Wall Street Journal that illuminated some of Polymarket’s shady marketing practices, saying the company has been “secretly” paying influencers to “make fake betting videos to advertise their platforms.” According to the suit, Polymarket has paid people, including celebrity Logan Paul, online influencer Clavicular, and political activists Riley Gaines and Brian Krassenstein for promotional purposes. The suit says Gaines, a former college athlete who now promotes conservative policies, was paid at least $6,000 by Modabber to make positive posts about Polymarket without disclosing she was receiving money to do so. It also claims Krassenstein, whose posts are often antagonistic to President Donald Trump, received at least $9,300 to make similarly positive Polymarket posts without disclosing his agreement with the company.
“This case is not about whether gambling and gaming laws apply to the Defendants,” the lawsuit says. “This case is about deceptive and unfair advertising practices.”
Specifically, the suit says Polymarket has targeted young Americans, including college students. Instead of pursuing those consumers “lawfully,” Polymarket “used many layers of manipulation to trick college-aged consumers, who suffered significant harms as a result,” the suit says. “Consumers could not avoid Defendants’ tactics, and these tactics served no beneficial purpose except to unfairly boost Defendants’ market share as compared with any company that did opt to follow bedrock advertising laws.”
The suit includes three counts, including deceptive marketing and unfair promotion to college-aged Americans. It wants an unspecified amount of damages, including “equitable restitution” and “disgorgement of profits,” as well as a ruling stipulating that Polymarket can no longer engage in the deceptive marketing practices it has been accused of.
A representative for Polymarket sent Front Office Sports the following emailed statement in response to a request for comment about the lawsuit:
“As the world’s leading prediction market, we are committed to maintaining accurate, fair, and transparent markets. We are part of a rapidly growing industry and are constantly evaluating ways to improve how we’re engaging and earning the trust of our audience. As part of that commitment, we are conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements.”
The NACA lawsuit comes the same day that the WSJ published another report that says a bipartisan group of senators have asked the CFTC to investigate Polymarket’s deceptive advertising. The report also cites an anonymous source as saying the CFTC, which has generally been favorable to prediction markets under the Trump administration, is actively probing Polymarket.
A source familiar with the matter confirmed to FOS that the CFTC is probing Polymarket.
