New York City Council Investigates Prediction Markets Over Marketing Concerns
Four major platforms face scrutiny regarding consumer protection compliance and the potential targeting of underage users.
The New York City Council has launched an investigation into four major prediction market platforms over their advertising practices and potential targeting of minors.
Council Speaker Julie Menin sent letters on 11 August to Polymarket, Kalshi, Coinbase and Gemini Titan, questioning their compliance with municipal consumer protection laws and whether current safeguards adequately protect residents from deceptive marketing.
In a letter to Polymarket reviewed by the Wall Street Journal, Menin requested details regarding promotional videos and alleged fake trades, citing reports that the platform collaborated with marketing agents and social media influencers to target young adults and potentially minors.
"Troubling news reports allege that Polymarket conspired with marketing agents and social media influencers to target young adults—and thus potentially minors—with false, deceptive, and unconscionable advertising",
Menin wrote.
Polymarket and Kalshi stated they look forward to engaging with the Council, while Coinbase confirmed it “fully complies with applicable laws”. Gemini Titan did not immediately comment. The companies have been given 14 days to respond.
Data Requested on Users, Revenue and Promotion
The inquiry includes more than 60 questions covering operations and promotional practices in New York, seeking data dating back to 1 January 2025.
The Council is requesting figures on local user numbers, demographic data, and total customer wins and losses within New York City. Regulators are also seeking details regarding financial compensation paid to social media influencers and the effectiveness of campaigns in attracting younger demographics.
While the City Council lacks the authority to bring criminal charges, it holds the power to issue subpoenas and mandate document production. Menin confirmed the Council is considering legislation to authorise increased enforcement, public education campaigns, and health measures alongside potential public hearings.
Focus Shifts to Consumer Protection
The municipal probe marks an expansion of political scrutiny facing prediction markets across the state, though its focus remains distinct from ongoing jurisdictional disputes.
New York Attorney General Letitia James filed a lawsuit against Kalshi on 31 July, alleging the company operates an illegal, unlicensed gambling business. Kalshi contends that its event contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC) as federally regulated derivatives. On the same day the Council issued its letters, the CFTC exercised emergency authority ordering Kalshi to continue operating under federal rules, while Kalshi and the CFTC have separately sued New York state in federal court.
Unlike state legal challenges centred on gambling classification and federal pre-emption, the City Council investigation focuses primarily on consumer protection, advertising practices and public safety.
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