Polymarket probes dozens of election bets before Nov. 3

Polymarket has investigated dozens of bets on its platform that involve the upcoming midterm election, according to Shana Bautista, the company's head of global intelligence and investigations.

Bautista, a former FBI official who joined the firm in June, leads a 16-person team tasked with monitoring election-related trades. Her group oversees both the U.S.-regulated version of Polymarket, which requires real-name identification, and Polymarket International, where users can trade anonymously with cryptocurrency.

A person familiar with the probes said at least two of the investigations have been referred to the U.S. Commodity Futures Trading Commission, the federal regulator for these markets. The individual was not authorized to speak publicly about the specific cases.

Bautista stated that her team uses a new surveillance system to pull gigabytes of data on each user. This data comes from social media accounts, Federal Election Commission records, cryptocurrency firms, banking partners, and statistical models. She said the team receives hundreds of alerts per day when users trigger internal red flags.

"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."

The scrutiny of prediction markets has increased as popularity for platforms like Polymarket and its rival Kalshi has grown over the past year. In April, Kalshi banned and fined several political candidates for betting on their own races. In May, Kalshi announced a system that blocks campaign staffers listed by the FEC from trading. By July, Kalshi reported blocking dozens of staffers, though one anonymous staffer told NPR they found ways to bypass the restrictions.

Rajiv Sethi, an economics professor at Barnard College, noted that election prediction markets are vulnerable to manipulation because outcomes can be self-fulfilling. He explained that if a candidate appears to be losing momentum, that perception can influence the actual result.

Bautista said her team looks for patterns such as multiple accounts opened in short bursts with consistent device IDs. She added that while crypto trades can appear anonymous, her team has identified the potential identities of traders in every case they have worked.