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The New York City Council said it is investigating the advertising practices of several prediction market platforms, adding fresh scrutiny to a fast-growing sector that already faces state and federal pressure.
Council Speaker Julie Menin said letters were sent to Kalshi, Polymarket, Coinbase and Gemini Titan as the council examines allegations of “false, deceptive, unconscionable and objectionable marketing practices.” According to the council, the probe will look at claims involving undisclosed influencer marketing, videos showing non-existent trades, fictitious profitable wagers that would have actually lost money, and promotion of insider trading.
Which companies and practices are under review
The council’s investigation follows earlier reporting on the industry’s marketing. The Wall Street Journal reported in June that Polymarket used social media influencers in ways that made it appear they were betting with their own money. CNBC also reported Tuesday that Polymarket is changing its marketing strategy after a Commodity Futures Trading Commission investigation.
Menin said the review is aimed at determining what legislation, regulations and programs may be needed. In a statement, she said prediction markets “aggressively entice consumers to bet and wager on sports, politics, culture, weather and pretty much anything.”
Councilman Harvey Epstein said the inquiry could help lawmakers assess whether new consumer protections are needed, including around predatory advertising and the potentially addictive nature of prediction markets.
Broader legal pressure is already building
The city council action comes alongside separate litigation from New York state. The state has sued Kalshi, Coinbase and Gemini, alleging they are operating illegal gambling businesses.
Those platforms have argued that they are federally regulated financial exchanges and therefore are not subject to state betting laws.
The companies named in the city probe have major New York ties. Kalshi, Polymarket and Gemini are based in New York City, while Coinbase is based in Texas and has said it plans to hire more than 1,000 people in New York.
What to watch next
The key unanswered questions are whether the council’s investigation leads to proposed legislation or other city-level action, and how the separate state lawsuits and the reported CFTC scrutiny develop. The source article did not include responses from the companies to the council’s letters.
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Source: As reported by Lisa Hornung.
