The CNN report is quick to note that no one at Polymarket has been accused of wrongdoing, but it is not surprising that prosecutors from the US attorney’s office for the Southern District of New York would want to negotiate.
There have been a number of highly suspicious trades on Polymarket in recent months, including some who placed bets on the timing of the start of the Iran war and the kidnapping of Venezuelan President Nicolas Maduro. a trader who speculates Maduro reportedly walked away with $30,000 and more than $430,000 when he was captured.
Polymarket was effectively banned in the US in 2022 for operating an unlicensed trading platform, but it bought a holding company in 2025 that offers licensed trading. The company received regulatory approval in November 2025 and is gradually relaunching in the US this year, although it is not yet widely available to most Americans.
Polymarket did not immediately respond to a request for comment, but told CNN: “Polymarket sets, maintains and enforces the highest standards of market integrity. We also actively work with regulators and law enforcement to reinforce those standards.”
Prediction markets (companies don’t like the terms gambling and betting) have exploded in popularity as betting seems to touch every aspect of modern American life. But it has been opposed by legislators and some members of the public who are concerned about the spread of gambling and insider trading.
Some opponents of the forecasting market are unhappy with the arrival of a new kid on the block in their area. Kalashi, another American prediction market platform operating legally in the US, was recently banned for two weeks in Nevada after it was sued by the powerful gaming industry there. The judicial order prevents contracts for anything related to sports, elections and entertainment, at least for the time being.
States have also gone after prediction markets, with Arizona’s attorney general filing criminal charges against Kalshi this month that the company called “meritless.”
“Kalashi may brand itself as a ‘prediction market,’ but it is actually running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” Arizona Attorney General Chris Mayes said in a statement published online.
Companies know they are under intense scrutiny not only from regulators but also from the average person placing a bet, who may feel things are unfair. Polymarket introduced new rules last week that ban bets from people who use stolen information or who have the ability to influence the outcome of an event. And Kalshi said it is introducing a new ban aimed at preventing politicians from betting on their elections and athletes from betting on the sports they play.
Love them or hate them, it seems like everyone is monitoring prediction markets as a snap poll or as a way to look over the horizon as circumstances can change quickly. Will traffic through the Strait of Hormuz return to normal by the end of April? Polymarket traders say there is a 24% chance, down from 43% as recently as March 24.
But it’s hard to say whether these prediction markets actually provide useful information about things that may or may not happen. That spike on March 24 was related to the news that President Donald Trump had offered Iran a 15-point peace plan and a ceasefire to end the war. We have since learned that Iran says there are no negotiations taking place between the two countries and that Trump appears to be merely manipulating the market.
And if people close to Trump know the real score, they can make a lot of money by placing bets shortly before something important happens. It’s a difficult thing to police even if they want to. Kalshi CEO Tarek Mansour was asked on CNBC about a bet on which Bad Bunny song would be the first to play at the Super Bowl. How do you protect against “insider trading” when the answer may be known to a large number of people, from TV crew members to background dancers? Not surprisingly, Mansour had no real answer. Maybe because there is no one there.
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