The New York City Council has launched an investigation into the prediction-market advertising activities of Polymarket, Kalshi, Coinbase, and Gemini Titan. The platforms face allegations of using misleading and aggressive marketing practices aimed at young users.
As part of the investigation, the companies have been asked to provide information about their advertisements in New York, social media campaigns, and agreements with content creators. The Council will also assess whether new regulations are needed to strengthen consumer protections.
New York seeks information from four platforms
New York City Council Speaker Julie Menin announced on August 12 that official letters had been sent to Polymarket, Kalshi, Coinbase, and Gemini Titan. The investigation focuses on the companies’ marketing and advertising activities that reach New York residents.
The Council will examine whether the platforms have used false, misleading, or abusive advertising. Possible efforts to target young people, minors, and users vulnerable to gambling addiction are among the main areas under review.
Prediction markets allow users to trade on the outcomes of real-world events involving politics, sports, culture, weather, and other topics. As the sector expands, New York officials believe these products are blurring the line between financial investments and online gambling.
Council Member Harvey Epstein pointed to estimates suggesting that total prediction-market trading volume could reach $300 billion in 2026. Officials want to determine whether existing consumer protection rules are sufficient as the industry’s advertising spending grows.
Polymarket advertising at the center of the investigation
The most detailed allegations in the investigation concern Polymarket. The Council is examining claims that the platform used social media influencers to encourage young adults to trade event contracts.
The allegations include failing to disclose that influencer content was paid advertising. Polymarket is also accused of showing fabricated trades on websites designed to resemble its platform and presenting positions that would have generated losses as profitable wagers.
The Council will also investigate whether promotional content encouraged insider trading. These allegations have yet to be confirmed by a court or regulatory authority.
According to Reuters, Polymarket said it was prepared to engage with the New York City Council regarding the investigation. The company was asked to respond within 14 business days to questions about its use of social media, influencers, and content creators.
Regulatory dispute over prediction markets intensifies
The New York investigation has renewed debate over which authorities should regulate prediction markets and which rules should apply. The platforms argue that their products are federally regulated event contracts rather than sports betting.
Companies such as Polymarket and Kalshi operate under the jurisdiction of the US Commodity Futures Trading Commission. State officials, however, believe some contracts effectively function as gambling products and should comply with local betting regulations.
The New York City Council has yet to impose penalties on the companies or announce a specific bill. The investigation could lead to new consumer protection rules, advertising restrictions, public awareness campaigns, or additional oversight measures.
A planned public hearing could increase political pressure on the platforms’ business models. The inclusion of major crypto companies such as Coinbase and Gemini alongside Polymarket suggests that the investigation may affect a broader segment of the prediction-market industry.
