The New York City Council has launched an investigation into Kalshi, Polymarket, Coinbase and Gemini Titan over allegations of false, deceptive and potentially predatory marketing. There are concerns about how prediction markets are reaching younger consumers.
Why New York Is Investigating
Council Speaker Julie Menin said the platforms aggressively encourage people to wager on sports, politics, culture, weather and other events. This raises concerns about potential harm to New Yorkers, particularly young people.
“We refuse to let New Yorkers, especially our young people, become collateral damage,” Menin said.
The Council has requested information from the four companies about their marketing practices in New York. Officials said the platforms were selected based on public reports and available information. In addition, they considered the reach of their advertising among city residents. The investigation could eventually expand to other prediction-market operators.
Polymarket Marketing Comes Under Scrutiny
Polymarket faces particular attention following a Wall Street Journal investigation that alleged the platform paid online creators to promote trades. It also allegedly made their earnings appear larger or more successful than they actually were.
Polymarket said it will review and audit its promotional content.New York officials are checking whether Kalshi and other platforms used similar marketing practices.The investigation will look at whether young adults were exposed to misleading promotions.Officials will also examine potential social harms from these practices.The inquiry could lead to new laws, stronger enforcement or public education in New York.
The Probe Is About Advertising, Not Contracts
Importantly, the Council’s investigation does not determine whether prediction-market contracts themselves are legal or illegal. The focus is specifically on advertising and promotional practices.
Coinbase said it provides access to federally regulated prediction markets overseen by the CFTC and complies with applicable laws. Polymarket said it looks forward to engaging with the Council. Meanwhile, Kalshi and Gemini Titan had not immediately responded to requests for comment.
State vs Federal Regulatory Fight
The investigation comes as prediction markets face a wider battle over regulatory authority. New York Attorney General Letitia James has sued Coinbase, Gemini Titan and Kalshi. She alleges they operate illegal gambling businesses under state law.
Meanwhile, the CFTC has challenged state efforts to restrict prediction markets. It argues that federal law gives it exclusive authority over derivatives. Lawyers, however, note that the extent of CFTC jurisdiction over sports-related contracts remains legally unsettled.
Why This Matters Now
The timing is important as prediction platforms prepare for the NFL season and the 2026 midterm elections, which are two major periods for trading activity. Kalshi, Polymarket and Gemini are based in New York. In contrast, Coinbase is headquartered in Texas and plans to expand its New York workforce.
With courts in several states issuing mixed decisions and the CFTC backing prediction markets, the New York inquiry adds another layer to an already complicated regulatory fight.
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