New York City Council probes prediction markets over marketing practices

The New York City Council has launched an investigation into the marketing tactics of four major prediction market platforms: Kalshi, Polymarket, Coinbase, and Gemini Titan. Led by Speaker Julie Menin, the probe targets alleged predatory and deceptive advertising practices, particularly influencer campaigns targeting young adults and minors. This municipal inquiry intensifies an ongoing regulatory conflict, as state officials like New York Attorney General Letitia James pursue illegal gambling lawsuits against the platforms, while the federal Commodity Futures Trading Commission asserts exclusive regulatory jurisdiction.

NYC Council investigation launch

• ▪The New York City Council launched an investigation on August 12, 2026, into the marketing tactics of four prediction market platforms: Kalshi, Polymarket, Coinbase, and Gemini Titan.
• ▪New York City Council Speaker Julie Menin sent letters to Kalshi, Polymarket, Coinbase, and Gemini Titan on August 12, 2026, giving the firms 14 days to respond to questions regarding their marketing practices and user demographics.
• ▪The New York City Council's investigation aims to determine if city officials need to consider additional measures, including legislation, public education, and enforcement, to protect consumers from prediction market marketing.

Deceptive marketing allegations

• ▪The New York City Council is investigating allegations that Polymarket paid social media creators to film themselves placing fake bets and wins on replicas of its site to target young adults and minors.
• ▪The New York City Council's inquiry seeks information on whether prediction market platforms use predatory marketing tactics that target younger people and encourage compulsive wagering on event contracts.

Federal-state jurisdiction dispute

• ▪The Commodity Futures Trading Commission claims exclusive jurisdiction over prediction markets as swaps, while state-level gaming authorities, including New York, argue the platforms offer illegal, unlicensed sports betting.
• ▪The Commodity Futures Trading Commission used its emergency authority to order Kalshi to continue operating in New York despite the state's lawsuit and efforts to shut down its operations.
• ▪New York Attorney General Letitia James sued Kalshi, alleging it operates an illegal gambling business, and requested a temporary restraining order alongside civil penalties that could total at least $36 billion.

Platform compliance statements

• ▪A Polymarket spokesperson stated that the company looks forward to engaging with the New York City Council regarding the marketing investigation.
• ▪Polymarket is working with a third-party consulting firm to oversee content released by promotion partners and has introduced a new structure for its marketing team.
• ▪A Coinbase spokesperson stated that the company offers customers access to federally regulated prediction markets overseen by the Commodity Futures Trading Commission and fully complies with applicable laws.

Prediction market industry expansion

• ▪In April 2026, New York Governor Kathy Hochul signed an executive order prohibiting state employees from using confidential government information to bet on prediction markets.
• ▪The prediction market industry has grown rapidly into a multibillion-dollar sector, offering financial contracts tied to sporting events, celebrity news, and geopolitical events.

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