NYC probes prediction markets over advertising practices

New York City Council has launched an investigation into four prediction market companies, accusing them of engaging in deceptive marketing practices. The probe will scrutinize the advertising strategies of Gemini Titan, Kalshi, and Polymarket, all based in New York, along with Texas-based Coinbase.

Council Speaker Julie Menin stated that prediction markets "aggressively entice consumers to bet and wager on sports, politics, culture, weather and pretty much anything." She emphasized the council's refusal to allow New Yorkers, particularly young people, to become "collateral damage" from these practices. Menin has requested detailed information from the platforms regarding their marketing activities within the city.

The investigation was prompted, in part, by a June report from the Wall Street Journal. That report uncovered that Polymarket allegedly paid online content creators to produce videos that misrepresented earnings from trades. In response to these findings, Polymarket stated it would conduct an audit of its promotional content.

This city-level inquiry highlights a broader regulatory conflict between state and federal authorities over the oversight of prediction markets. Several states have initiated legal action against these platforms, with New York's Attorney General Letitia James suing Coinbase, Gemini Titan, and Kalshi for allegedly operating illegal gambling operations. Meanwhile, the federal Commodity Futures Trading Commission (CFTC), which oversees prediction markets, argues it has exclusive jurisdiction, leading to ongoing legal battles over regulatory control.

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Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather and pretty much anything. We refuse to let New Yorkers, especially our young people, become collateral damage.