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Consumer group alleges Polymarket violated law with influencer utilization

Legal Writer

Publish Date: Jun 29, 2026

Fact checked by: Matt Moreno

Key Points

National Association of Consumer Advocates alleges Polymarket misled consumers in lawsuit
Report claims Polymarket executives paid individuals for social media posts
Lawsuit seeks restrictions on Polymarket marking and damages for users

The National Association of Consumer Advocates has sued Polymarket in the Superior Court of the District of Columbia, alleging that the prediction market exchange has deliberately deceived consumers through the non-disclosed use of paid influencer campaigns. The lawsuit follows a Wall Street Journal report that exposed transactions between Polymarket executives and several individuals who made posts mentioning Polymarket to their social media accounts.

If substantiated, the lawsuit could result in fines and limits on how the company advertises its products plus an order from the court to make restitution to traders. The complaint also claims that Polymarket has intentionally targeted younger adults in its marketing practices, which could violate Washington, D.C. law as well.

NACA accuses Polymarket of misleading consumers

The National Association of Consumer Advocates (NACA) filed its suit on Friday. The filing names Polymarket, CEO Shayne Coplan, and Chief Marketing Officer Matthew Modabber as defendants.

The main allegations of the complaint center on claims that the company, with Coplan and Modabber party to the decisions, “orchestrated a sweeping and flagrantly deceptive marketing campaign that lures Americans into risking real money while obscuring how likely people are to lose.”

To support the allegations, the complaint cites a March 2026 Wall Street Journal article that revealed transactions from Modabber’s PayPal account to multiple individuals who have thousands of followers on social media. All the recipients of the payments made posts to their social media accounts mentioning Polymarket without disclosing the payments they had received from Modabber.

Additionally, the lawsuit accuses the defendants of “unfairly targeting college-aged individuals with manipulative ads for their platforms.”

Lawsuit disputes college campus campaigns

Polymarket also faces accusations in the lawsuit connected to its contracting of a firm that conducts marketing on college campuses and partnerships with fraternities. At issue in the complaint is an invitation from Polymarket to members of Columbia University’s Sigma Phi Epsilon fraternity.

During that meeting, fraternity members were allegedly offered registration bonuses that paid out commissions to the fraternity. The allegations also state that Polymarket’s work with CampusGTM, the marketing firm in question, violates District of Columbia law by unfairly targeting younger adults.

As relief, the lawsuit asks the court to enjoin Polymarket from continuing the practices in question and order Polymarket to make restitution to affected individuals. The complaint also seeks damages for consumers.

Polymarket has not yet filed a response to the lawsuit, but it has publicized a response to the reports in the media around the allegations.

Polymarket announces internal investigation following article

The Wall Street Journal hasn’t been the only publication in the past six months to report on Polymarket’s marketing practices. March and June reports from the New York Times and Politico, respectively, have made similar allegations.

As a result, U.S. Senators John Curtis (Republican, Utah) and Adam Schiff (Democrat, California) have called for an investigation into Polymarket according to the Wall Street Journal. That has prompted action from Polymarket.

Polymarket told CBS News that it has initiated an internal investigation in response to threats of referrals to the Federal Trade Commission (FTC) from the senators. The allegations in the various reports represent possible violations of FTC regulations and federal “truth in advertising” laws as well.

At this point, Polymarket only faces the lawsuit in Washington, D.C. in terms of potential legal consequences from the allegedly illegal marketing practices. That could be only the beginning of the fallout, though.

For more news and updates like this, head over to our Ballislife Play page.

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