New York City Council Probes Prediction Market Advertising Practices

The New York City Council has launched a legislative inquiry into the advertising practices of four major prediction market platforms: Polymarket, Kalshi, Coinbase Global Inc., and Gemini Space Station Inc.’s Titan. Council Speaker Julie Menin requested detailed data on user demographics, marketing effectiveness, and influencer payments to determine if current laws protect residents from deceptive marketing and compulsive wagering.

The probe follows reports that Polymarket used social media creators to film fake profitable trades to attract minors and young adults. These allegations of misleading campaigns, where partnered creators appeared to win without using their own money, also triggered a federal investigation by the Commodity Futures Trading Commission (CFTC).

This municipal action occurs amid a broader regulatory conflict. While the CFTC views event contracts as financial instruments under federal oversight and recently ordered Kalshi to continue operating in New York, state officials argue the platforms constitute illegal, unlicensed gambling. New York state is currently litigating against Kalshi, Coinbase, and Gemini over these gambling allegations. The City Council's investigation focuses specifically on marketing harms rather than state gambling laws and may lead to new legislation or policy changes.