Polymarket sued by consumer advocates for allegedly targeting college students with deceptive influencer campaigns

A consumer advocacy group has taken Polymarket to court, alleging the prediction market giant ran a coordinated campaign to lure college students into real-money betting through paid influencers, staged videos, and promotions that glossed over the financial risks involved.

The National Association of Consumer Advocates (NACA) filed the lawsuit in D.C. Superior Court, naming CEO Shayne Coplan and Chief Marketing Officer Matthew Modabber as defendants. The complaint lays out three counts of deceptive marketing practices and unfair promotion, seeking unspecified damages, equitable restitution, and an injunction to stop the alleged conduct.

What the lawsuit actually alleges

According to the lawsuit, Polymarket paid influencer Riley Gaines $6,000 and Brian Krassenstein $9,300 to promote the platform without properly disclosing those financial arrangements. The complaint alleges these weren’t isolated payments but part of a broader strategy specifically designed to reach college-aged individuals. Staged betting videos and misleading promotional content allegedly downplayed the risks of participation.

The filing was reportedly triggered by a Wall Street Journal investigation into Polymarket’s marketing strategies, which apparently provided much of the factual foundation for NACA’s claims.

The bigger regulatory picture

The platform only launched its domestic app in December 2025 after years of operating internationally due to US restrictions. So the timing is notable: almost immediately after returning to American shores, the company faces allegations that its re-entry strategy leaned heavily on questionable marketing aimed at a demographic that regulators tend to be protective of.

Senators John Curtis and Adam Schiff have both called for a federal probe into Polymarket’s practices by the Commodity Futures Trading Commission. The CFTC is reportedly already investigating the matter.

For its part, Polymarket has said it is committed to enhancing transparency and is conducting an audit of its promotional content.

What this means for investors and the prediction market industry

Polymarket became a household name during the 2024 US presidential election, with its odds frequently cited by major news outlets as a real-time gauge of voter sentiment.

The influencer disclosure issue alone could have far-reaching consequences. The Federal Trade Commission has been tightening enforcement of disclosure rules for years, and a high-profile case involving a crypto-adjacent platform paying influencers without proper transparency could accelerate that trend across the entire industry.

The CFTC investigation adds another layer of uncertainty. If the agency determines that Polymarket’s products constitute regulated financial instruments being marketed deceptively, the compliance costs for the entire prediction market sector could spike dramatically. Smaller platforms without Polymarket’s resources might find it prohibitively expensive to operate in the US market at all.

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