Elected U.S. officials are tired of waiting for answers from America’s leaders in prediction markets, Kalshi and Polymarket.
U.S. Sens. Alex Padilla (D-CA) and Mark Warner (D-VA) demanded the platforms take immediate action to protect election integrity ahead of the November midterms. They also told them to end their affiliate partnerships with influencers.
Prediction markets sway public influence for elections
Polymarket is already under investigation for allegedly deceiving the public with screenshots of fake wins. The Wall Street Journal reported in June that the platform paid online creators to showcase videos of $1.9 million in winning trades, despite about 70% of those trades being linked to dummy websites.
The new commandments from the Senators are completely unrelated, although they also involve aspects of the promotion of prediction markets.
Padilla and Warner said in their letter that there were growing concerns about the sanctity of elections due to messaging about election fraud from paid affiliates. The letter also highlighted specific posts that allegedly spread “disinformation” and undermined election integrity.
“By creating and aggressively promoting markets on elections, your platforms now play a significant role in shaping Americans’ perceptions of their elections,” wrote the Senators. “We are seriously alarmed that your marketing strategy includes paying numerous social media influencers willing to espouse unreliable information on elections. In doing so, we are concerned that your prediction market platforms may be subsidizing — and amplifying — social media influencers who echo President Trump’s baseless attacks and sow distrust in American elections.”
Fighting election abuse
In addition to calling out perceived issues with the promotion of political and election prediction markets, the letter asked a series of questions that required answers from executives employed by the respective operators. These questions pertained to content and strategy, policies for influencers who create content about elections, how disinformation was treated, and the vetting process for affiliates.
“In July, a series of major social media influencers, including former Congressman Matt Gaetz, all posted similar ‘paid partnership’ posts linking to Polymarket and Kalshi charts showing the odds of enactment of the SAVE Act dropping to all-time lows,” the letter read. “As Majority Leader Thune has noted, much of the pressure on the Senate to pass the SAVE Act, rooted in false claims of widespread election fraud, comes from ‘paid influencers.’
“As your platforms work to respond to these questions, we urge you to act now to reevaluate all paid influencer relationships regarding elections, thoroughly vet all existing and future paid influencer arrangements, and immediately terminate any existing relationships with those who spread election misinformation, disinformation, or undermine the integrity of U.S. elections.”
Padilla previously showcased his focus on upcoming elections. He introduced the Stop Harassment and Intimidations in Elections through Legal Defenses (SHIELD) Our Elections Act, which would allow states and voters to use federal election protections and enforcement actions to prevent ballots from being seized.
Padilla also teamed up with Sen. Jeff Merkley (D-OR) in June to present the Fraudulent Artificial Intelligence Regulations (FAIR) Regulations Act to protect voters from the misuse of artificial intelligence and its ability to suppress votes.
The Trade Handle Prediction Markets Take
Prediction markets have become popular topics of conversation on social media, and paid affiliates are increasingly important in a digital world. Preserving election integrity is a battle that now takes place online, and the latest government action is a natural step after The Wall Street Journal’s report led to an investigation. It is unclear how or if the platforms responded, and what action could be taken if their responses are not to the liking of the Senators, who lack the Commodity Futures Trading Commission’s power to regulate prediction markets.