Polymarket recently made headlines thanks to a debit card scam scheme. Now the Better Business Bureau (BBB) is sounding the alarm on growing scam concerns surrounding prediction markets.
The BBB has issued a consumer warning, pointing out the fact that scammers are capitalizing on confusion surrounding online gambling and prediction markets. The focus is on fraudulent parties building convincing websites or apps that accept deposits and take bets, but won’t allow users to claim their money.
Scammers Exploit Confusion Surrounding Prediction Markets
There is growing concern involving this practice by scammers, as they are creating platforms that resemble believable sportsbooks, DFS sites, or prediction market sites.
The BBB suggests that it is too easy to confuse regular consumers, making it difficult for bettors and traders to know if they are dealing with a credible business or an unlicensed operator.
A broader study by the BBB revealed almost 200 Scam Tracker reports and over 10,000 complaints related to online gambling between 2022 and 2025.
More Clarity Coming Through Prediction Market Regulation
Prediction markets aren’t necessarily responding to the BBB’s findings, but they’ve been proactive in taking out their own dirty laundry.
Industry leaders such as Kalshi and Polymarket have been aggressive in detecting and penalizing accounts involved with insider trading infractions. More importantly, even in the face of a buzzing legal battle, Kalshi has been very public about their plight to lay down guidelines to guarantee player safety.
The company’s CEO recently said the site “wants more guardrails” and has prioritized regulation over speed or growth from the beginning.
Kalshi isn’t alone in trying to align protection with branding and building a business. Underdog, which has only been in the prediction market game on an official basis since July, recently made the news for seeking external trade surveillance to boost their platform’s security.
Growth Puts Greater Emphasis on Protecting Users
The meteoric rise of the prediction market industry is awe-inspiring, but it’s also the type of speedy development that is understandably met with some trepidation.
Prediction markets will say all the right things when in the public eye, but the reality is their main focus has to be growing and profiting. Maintaining a secure and trustworthy infrastructure has to align with that plight, however, and it does appear that most of the top platforms take that responsibility seriously.
Despite that, the risks are clear. The BBB highlights obvious concern with external players, which is a reminder that the prediction market industry is at risk of corruption no matter where you trade.
Kalshi and the other big prediction markets can’t control what happens outside of their platforms, however. All they can do is commit to top shelf security measures and execute within their own network.
The Trade Handle Prediction Markets Take
The surge in prediction market scams isn’t a new problem. There have always been blacklisted online casinos and sportsbooks for this very reason. As prediction markets grow in popularity, new sites will rise up, and consumers will need to do their due diligence to make sure they’re using a trustworthy platform.
This does tie into the ongoing prediction market regulation battle, though. Long-term, there may need to be firm regulatory rulings that all prediction market sites abide by. That could make the whole regulatory discussion easier to digest, but also simplify things for unsuspecting users who may otherwise be taken advantage of.
For the big players in the prediction market industry, this is actually not bad news. It only allows them to double down on their legitimacy, and cuts smaller companies at the knees when considering trust level and brand recognition.