The Market Is Watching Itself: Polymarket's Hunt for Insider Bets
Four days before the November 3 midterms, Polymarket is investigating dozens of its own election bets. The platform runs 506 individual election markets, and its compliance team is examining trading that may have used information traders had a duty to protect. At least two cases have already been referred to the Commodity Futures Trading Commission.
The hunt is led by Shana Bautista, a former FBI official who joined Polymarket in June and now runs a 16-person intelligence and investigations team. Its surveillance system pulls gigabytes of data per user — social media, Federal Election Commission filings, banking partners, cryptocurrency records and statistical models — and processes hundreds of alerts a day. Concentrated trading bursts, multiple accounts behaving alike and shared device identifiers all trigger a closer look, and alerts that cross internal thresholds go straight to Bautista's phone.
The money at stake explains the effort. Combined midterm trading across Polymarket and Kalshi passed $220 million by mid-October. Polymarket's House control market has drawn $24 million with Democrats priced at 92%, its Senate market $9 million with Democrats at 66%, and its balance-of-power contracts price a Democratic sweep at 65% against just 8% for a Republican sweep. Texas leads the Senate battlegrounds at $7 million in volume, with Michigan and Maine at $3 million each.
Polymarket is not alone in policing itself. Kalshi banned and fined political candidates for betting on themselves in April and handed a lifetime ban to former Rep. George Santos in July; it has opened more than 150 investigations this year and sent over 20 cases to law enforcement. Polymarket itself had previously referred more than 100 cases across various markets to law enforcement.
That self-policing now carries the market's credibility. Election prices shape fundraising, media narratives and voter perceptions, so a price moved by private polling is not just a bad trade — it distorts the signal everyone else is reading. Bautista's warning is blunt: if you have information you have a duty to protect, do not trade on it — we will find you.
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