Polymarket has looked into dozens of bets tied to the U.S. midterm elections, and at least two of those cases have been handed to the Commodity Futures Trading Commission, according to a report on the company's internal review. The firm's newly installed head of investigations said the platform's surveillance system now turns up hundreds of alerts every day, a volume that keeps a small team busy sorting routine noise from cases that need a closer look.
The disclosure offers a rare look at how a prediction market polices its own order book, and it lands as regulators weigh how far their authority reaches into event contracts that hinge on elections.
What the surveillance system catches
The setup at Polymarket isn't a manual review of every trade. Automated monitoring scans activity and fires alerts when something looks off — a pattern of buying that clusters before news, accounts that seem linked, or positions that move in ways the system associates with people trading on information they shouldn't have. Those alerts number in the hundreds each day, which means the investigations team spends much of its time triaging: most flags get cleared quickly, and a smaller set gets escalated.
The head of investigations, who joined the company to run that function, described the process as a constant filter. The goal isn't to chase every ping but to find the handful that suggest a market is being gamed. Polymarket declined to detail which specific midterm markets drew scrutiny or what the allegations in those cases involve.
Two referrals to the CFTC
At least two of the cases that came out of the review have been referred to the CFTC, the federal agency that oversees commodity and derivatives markets and has been asserting a role over event-based contracts. A referral doesn't mean charges are coming; it means the company passed information to regulators and left the next move to them. The CFTC hasn't said publicly what it plans to do with the referrals, and Polymarket hasn't identified the markets involved.
That handoff matters because prediction markets occupy a contested regulatory space. Polymarket has faced questions before about whether its contracts fall under the CFTC's jurisdiction, and the agency has been weighing how to treat election-linked products more broadly.
Why midterm markets draw attention
Election bets are a magnet for scrutiny because the information that moves them — polling shifts, candidate health, party strategy — is often held by a small number of people before it becomes public. A market that prices a Senate race or a House seat can look efficient one day and suspicious the next if a cluster of accounts suddenly bets the same way. The midterms, with dozens of individual races and a long run-up, generate a lot of that kind of activity, which is likely why the internal review touched so many markets.
Polymarket's answer has been to build out the investigations function and lean on automated detection rather than waiting for complaints. The company says the system is designed to surface problems early. Whether that's enough to satisfy regulators is a separate question.
What comes next
The CFTC now holds at least two Polymarket referrals, and its response — a request for more information, a formal inquiry, or no action at all — will shape how the company handles future election cycles. Polymarket hasn't said whether it will publish findings from its internal review or how many of the dozens of midterm cases it looked into were closed without escalation. The investigations team, meanwhile, keeps working through the daily alert queue, with the next round of state and federal races already on the calendar.
