New York City Council opens probe into prediction-market marketing after Polymarket exposé The New York City Council has launched a formal inquiry into the marketing tactics used by four major prediction-market platforms — Polymarket, Kalshi, Coinbase and Gemini Titan — amid allegations that some event-contract firms use misleading advertising to lure consumers. Council Speaker Julie Menin’s office said the review, which has been underway for several months, focuses on “false, deceptive, unconscionable, and objectionable marketing practices” across the sector. Menin has sent letters to the four companies requesting details about how they promote event contracts tied to sports, politics, culture, weather and other topics. The council also plans a public hearing to decide whether existing consumer protections are adequate or whether new legislation or policy action is needed. “Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather, and pretty much anything,” Menin said, adding that she intends to use the council’s authority to protect New Yorkers from what she called deceptive and predatory marketing. Why the broader probe? Menin’s inquiry was prompted in part by a Wall Street Journal investigation into Polymarket’s promotional practices. The WSJ reported in June that many promotional videos appeared to show creators making real trades and profits on the platform when, in many cases, they were displaying simulated activity. Key findings cited in Menin’s letters and media reporting: - The WSJ reviewed 1,105 videos posted between December 2025 and mid-May and found about 70% featured simulated trades rather than real market activity. - The videos displayed roughly $1.9 million in simulated bets and nearly $900,000 in apparent winnings — amounts that, if placed on the live platform, would often have produced losses. - The WSJ also reported creators received roughly $2,000–$3,000 per month through marketing contractor Virality and were instructed not to disclose sponsorships. - Analytics firm Tubular estimated these promotional clips generated more than 140 million views across TikTok, YouTube and Instagram. Regulatory and company responses The WSJ reporting prompted a probe by the Commodity Futures Trading Commission (CFTC) into Polymarket’s marketing and other practices, according to Bloomberg and CNBC. Polymarket said it was auditing active promotional material for compliance and has since tightened some marketing guidelines for staff and content creators. A company spokesperson told the council, “We look forward to engaging with The New York City Council on this matter.” Coinbase defended its offering to CNBC, saying it provides access to “federally regulated prediction markets overseen by the CFTC, and fully complies with applicable laws.” Kalshi said it “looks forward to educating the New York City Council about our business model and practices.” Scope: marketing and consumer protection, not state gambling law The city council’s memo stresses that this investigation is narrowly focused on advertising and consumer protection issues — not on whether event-contract exchanges violate New York state gambling laws. That legal fight is being fought separately at the state level. State litigation and related disputes New York Attorney General Letitia James has already filed suits against Coinbase Financial Markets and Gemini Titan, alleging those firms ran unlicensed prediction-market businesses in violation of state gambling and licensing laws. The state has sought at least $2.2 billion from Coinbase and $1.2 billion from Gemini in those actions. Coinbase moved its case to federal court, arguing the matter raises questions of federal jurisdiction because prediction markets fall under CFTC oversight. Kalshi has been the subject of separate New York litigation; a U.S. district judge denied Kalshi’s request for a preliminary injunction in July, allowing the state’s case over sports-related contracts to proceed. The ruling found Kalshi had not shown it was likely to demonstrate federal law preempts New York gambling rules at that preliminary stage. Polymarket’s distinct status Polymarket has not been the target of comparable state litigation, in part because its main international platform has historically blocked U.S. customers after a 2022 settlement with the CFTC. Under that settlement the firm paid a $1.4 million civil penalty and agreed to wind down markets not compliant with U.S. law. Polymarket later acquired CFTC-regulated derivatives exchange QCX in 2025 for about $112 million and has sought CFTC approval to restore U.S. access to its primary service. The spotlight widened when Senators Adam Schiff and John Curtis asked CFTC Chair Michael Selig in June for information about advertising standards, influencer disclosures, consumer safeguards and age-verification practices for prediction markets. Local ties and next steps All four companies named in the council letters have strong New York connections: Kalshi, Polymarket and Gemini are headquartered in New York City; Coinbase is officially based in Texas but has been expanding its New York workforce. The council’s inquiry will include a public hearing and aims to determine whether New York City needs stronger consumer-protection measures or new regulation to curb deceptive marketing by prediction-market platforms. What to watch - The City Council hearing and any proposed local legislation or policy changes. - Outcomes of the ongoing CFTC inquiry into Polymarket’s marketing. - Progress in the state-level lawsuits against Coinbase, Gemini and Kalshi, and any further federal preemption arguments. The council’s action spotlights growing regulatory and political scrutiny of how crypto-enabled prediction markets market themselves — and whether current disclosure and consumer-protection frameworks are keeping pace. 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