The New York City Council has opened an investigation into the marketing practices of Polymarket, Kalshi, Coinbase and Gemini Titan, with officials examining whether prediction market operators are using deceptive advertising or targeting younger consumers.
Council Speaker Julie Menin announced the inquiry on August 12 after sending formal letters to the four platforms. The investigation will assess how the companies promote event contracts to New Yorkers and whether existing consumer protection rules are sufficient to address potential risks.
The Council said it is particularly concerned about advertising that may reach young adults or minors, as well as promotions that could encourage compulsive trading. Officials are considering whether further legislation, enforcement measures, public education initiatives or health-related protections are needed as prediction markets expand in the city.
Council Seeks Details on Users and Marketing
The platforms have been asked to provide extensive information covering their operations and promotional activity. The requests include data on New York users, customer demographics, trading results and marketing campaigns dating back to January 1, 2025.
The Council also wants information on payments to influencers and content creators, the effectiveness of campaigns aimed at younger audiences and the companies’ procedures for complying with New York City consumer protection laws. The letters contain more than 60 questions, according to Gambling Insider.
Polymarket has attracted particular attention following allegations surrounding some of its promotional material. The Council cited reports claiming that influencers were used without appropriate disclosure and that videos showed simulated trades on interfaces designed to resemble the platform. Other allegations include promotional examples portraying unsuccessful positions as profitable and content that appeared to encourage trading on inside information.
The Council is seeking to establish whether similar practices are used more broadly across the prediction market sector rather than only by Polymarket.
Polymarket said it intends to cooperate with the inquiry. Kalshi has also indicated that it expects to engage with the Council, while Coinbase has maintained that it complies with applicable laws.
The companies were given 14 business days to respond to the Council’s requests. Public hearings on the prediction market industry are also planned. While the Council cannot bring criminal charges, it can use subpoenas to obtain documents and could pursue new local consumer protection measures based on the investigation’s findings.
Pressure on Prediction Markets Grows in New York
The advertising investigation comes alongside a separate regulatory dispute between New York authorities and the prediction market industry.
New York Attorney General Letitia James sued Kalshi on July 31, alleging that the company operates an illegal and unlicensed gambling business in the state. Kalshi maintains that its event contracts are federally regulated derivatives and therefore fall under the exclusive jurisdiction of the Commodity Futures Trading Commission rather than state gambling authorities.
The latest City Council action takes a different approach. Instead of focusing primarily on whether prediction markets legally qualify as gambling, the inquiry centers on advertising, consumer protection, minors and the potential social effects of rapidly expanding event-contract platforms.
City officials have also highlighted a regulatory gap between prediction markets and conventional gambling businesses, noting that several advertising and consumer safeguards applied to casinos and licensed online sportsbooks do not currently apply in the same way to prediction market operators.