NYC Council prediction market probe targets marketing practices
New York City Council is examining advertising by Polymarket, Kalshi, Coinbase and Gemini Titan, separate from state gambling litigation.
By Maya Okafor · Markets Writer
· 3 min read
The NYC Council prediction market probe is focused on how platforms market their products to consumers, rather than on whether those products violate New York gambling law. That distinction matters for investors watching Coinbase and Gemini, and for users of platforms facing growing regulatory attention from more than one direction.
New York City Council Speaker Julie Menin’s office said Wednesday that the Council has opened an inquiry into marketing by Polymarket, Kalshi, Coinbase and Gemini Titan. According to CNBC’s reporting on Menin’s letters, the Council is examining allegations of false, deceptive, unconscionable and objectionable marketing by event-contract exchanges.
Prediction markets offer contracts whose value depends on the outcome of an event, such as a political contest, sporting event or weather outcome. Menin said the platforms encourage consumers to wager on a broad range of subjects and said the Council would seek to protect New Yorkers from deceptive and predatory marketing, CNBC reported.
What is the NYC Council investigating?
The Council is looking at whether marketing practices alleged at Polymarket may be occurring elsewhere in the prediction-market business, according to Menin’s office. It is also assessing whether city protections are sufficient and whether policy changes or legislation may be needed. The Council plans to hold a hearing, although no date, location or list of witnesses was announced.
The letters cited reporting by The Wall Street Journal that alleged Polymarket’s arrangements with some content creators gave audiences the impression that the creators were making winning trades with their own funds when they were not. The Council has not presented that allegation as an established finding, and the inquiry is intended in part to determine how broadly similar practices may be used.
How does this differ from New York’s lawsuits?
The City Council’s review is separate from New York state litigation against Kalshi, Coinbase and Gemini. The state alleges those companies are operating illegal gambling businesses, according to CNBC. The Council memo specifically said its marketing inquiry will not determine whether event-contract exchanges violate state gambling law.
Kalshi, Coinbase and Gemini dispute the state’s characterization. The platforms have said they are federally regulated financial exchanges that are not subject to state betting laws. Coinbase said it provides customers access to prediction markets overseen by the Commodity Futures Trading Commission and complies with applicable laws.
- City Council inquiry: advertising, consumer protections and possible policy action.
- State cases: claims that certain platforms are conducting illegal gambling operations.
- Companies’ position: their prediction-market offerings fall under federal oversight.
Polymarket said it looked forward to engaging with the Council. Kalshi and Gemini did not immediately respond to CNBC’s requests for comment. New York state was not in litigation against Polymarket at the time of the report.
For investors and users, the immediate development is a policy inquiry rather than a ruling or enforcement action. Its longer-term importance will depend on what the Council finds, whether it advances legislation and how the separate state cases proceed.
This story draws on original reporting from CNBC.
