Class Action Follows NACA’s Polymarket Influencer Lawsuit

In June, we posted about a lawsuit filed by the National Association of Consumer Advocates (“NACA”) against Polymarket, alleging that the company used deceptive influencer campaigns—including undisclosed paid endorsements, fake betting videos on simulated platforms, and a ​“clipping” scheme to manufacture virality—in violation of Washington, DC’s Consumer Protection Procedures Act. 

Not long after NACA filed its lawsuit, a DC resident filed a class action lawsuit against Polymarket targeting many of the same practices. The complaint alleges that Polymarket recruited content creators to film videos of themselves placing bets and winning money on the platform. Unbeknownst to viewers, though, the bets were staged on fake copies of the Polymarket website that the company itself built and operated on its own servers. 

The complaint alleges that in roughly one in ten of the videos, the creators went further, splicing in outdated footage and fabricating headlines to make a losing bet look like a jackpot. Across the videos analyzed in a Wall Street Journal report, creators appeared to win close to $900,000. In reality, the complaint alleges that the same bets placed on the real platform would have resulted in more than $166,000 in losses.

Unlike the NACA suit or the other class actions we’ve seen in the area, this complaint does not rely on the FTC’s Endorsement Guides, focusing instead primarily on the content of the posts.

Polymarket may be in the prediction business, but it didn’t seem to have predicted these two lawsuits (or the NAD investigation we posted about). Whether these lawsuits ultimately succeed remains to be seen, but the cases serve as a reminder that marketing campaigns built for virality can also go viral in a very different forum: the courthouse.