Polymarket Investigates Dozens of Election Bets as Midterms Near

Polymarket has investigated “dozens” of bets on its prediction markets tied to the midterm election, according to Shana Bautista, the company’s head of global intelligence and investigations. The probes target suspected insider trading and market manipulation just days before the Nov. 3 vote. At least two of the cases have reached the company’s regulator, the U.S. Commodity Futures Trading Commission (CFTC), according to a person familiar with the investigations who could not speak publicly about them.

A Booming Industry Under Pressure

The investigations arrive as Polymarket and its chief competitor, Kalshi, have exploded in popularity over the past year. That rapid growth has drawn significant scrutiny. The industry now faces legal challenges from states and political pushback from lawmakers who argue that betting on election outcomes poses serious risks to the democratic process.

Enforcement problems have already surfaced this year. In April, Kalshi banned and fined a handful of political candidates for betting on themselves. A month later, NPR reported that campaign staffers had made “thousands” by using insider polling information to bet on their own candidates on platforms such as Polymarket and PredictIt.

Those episodes show how privileged political information can create an unfair edge in election markets. Campaign staffers, candidates and others close to the process often hold data that the public does not see. Polymarket now says it wants to catch anyone who tries to profit from that advantage.

A Former FBI Official Leads the Effort

Bautista, a former FBI official and cryptocurrency analyst, joined Polymarket in June. She leads a team of 16 people and a new election surveillance system that actively polices election bets ahead of the midterms. She described her approach to NPR and sent a direct message to anyone who holds confidential information.

“If you have information that you have a duty to protect, don’t trade on it,” Bautista 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.”

Her warning targets people who gain sensitive knowledge through their professional responsibilities. She stressed that the ban comes from two sources: Polymarket’s own rules and the law itself. The company, in other words, treats election insider trading as both a policy violation and a legal one.

Two Platforms, Two Levels of Anonymity

Bautista oversees information from two distinct operations. The U.S.-regulated version of Polymarket requires users to provide their real identities. Its larger sibling, Polymarket International, is essentially unregulated and lets users trade anonymously with cryptocurrency.

That split could look like a gap in oversight, since anonymous crypto accounts might seem hard to trace. Bautista rejected that idea. She said crypto trades are rarely completely anonymous, and she pointed to her team’s record of finding the people behind suspicious activity.

“There’s never been a case that we work where we haven’t been able to identify, potentially, who these people are,” Bautista said.

Her wording leaves some room, because she said investigators can identify people “potentially.” Even so, the claim signals that Polymarket believes anonymity offers little protection to anyone who trades on protected information. The company wants would-be violators to hear that message before the election.

How the Surveillance System Works

The surveillance system draws on a wide range of sources. According to Bautista, it pulls “gigabytes” of data on each user from social media, Federal Election Commission data, cryptocurrency companies, banking partners, statistical models and other public information sources. By combining those streams, the system builds a detailed picture of who is trading and what they might know.

The setup works through internally defined red flags. When a user hits a certain number of those flags, Bautista gets an alert on her phone. The company has not detailed what the flags are, so the exact triggers remain unclear.

The volume of alerts shows how much activity the team must sort through. Bautista said the system produces a substantial stream of notifications every day.

“We’re getting hundreds of alerts a day,” Bautista said.

What the Probes Mean for Prediction Markets

The dozens of investigations and at least two referrals to the CFTC show that Polymarket now treats election integrity as a core enforcement priority. The company operates under heavy outside pressure, and lawmakers have questioned whether election betting belongs in the market at all. Visible enforcement may help the company answer critics who say these platforms invite abuse.

The earlier cases at Kalshi, PredictIt and Polymarket show that the risk is real. Candidates and campaign staffers have already tried to profit from their own races. Bautista’s team now has the tools to track that behavior, and the company has put would-be violators on notice.

The coming weeks will test those tools. With the Nov. 3 midterms near, trading on election outcomes will likely intensify, and so will the alerts that reach Bautista’s phone. Her message to anyone tempted to use confidential information is unambiguous: Polymarket says it will find them.