U.S. — Polymarket is conducting an audit of its promotional content after The Wall Street Journal reported the company paid online content creators to produce videos depicting false large betting wins.

The report stated that most of the analyzed videos featured trades executed on dummy sites designed to resemble Polymarket. These videos showed customers winning a total of $1.9 million. The report also stated that Polymarket hired a marketing contractor to instruct individuals who redistribute videos to repost content.

A Polymarket spokesperson said the company is auditing active promotional content. "As part of that commitment, we are conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements," the spokesperson said. Polymarket allows users to place wagers on the outcomes of future events. "As the world's leading prediction market, we are committed to maintaining accurate, fair and transparent markets," the spokesperson said.

The findings were based on interviews with social media content creators and an analysis of more than 1,100 TikTok videos from 10 creators. Approximately 10% of these analyzed videos, totaling 118, depicted creators winning almost $900,000. If the creators had placed the identical bets shown in the videos, they would have lost more than $166,000.

One social media video, for example, showed a student winning $100,000 after placing a $1,000 bet that former President Donald Trump would say the word "McDonald's" publicly in a given month. Website records indicate 50 accounts placed bets that former President Trump would use the name "McDonald's," and all of these bets resulted in losses. "We are part of a rapidly growing industry and are constantly evaluating ways to improve how we're engaging and earning the trust of our audience," the spokesperson said.

Federal law requires advertisements to be truthful and not misleading, and, when appropriate, backed by scientific evidence, according to the Federal Trade Commission. Regulators banned Polymarket from operating in the U.S. in 2022 after the company settled allegations that it was operating an unregistered options exchange. Much of Polymarket's trading volume remains concentrated in its overseas markets. Polymarket states that insider trading is prohibited on its platform, and it updated its rules in March to prohibit trades based on "stolen confidential information" or illegal tips.