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The New York City Council has launched an investigation into prediction market operators Kalshi and Polymarket, along with Coinbase and Gemini Titan, over alleged deceptive marketing practices and possible targeting of underage users.
Council Speaker Julie Menin sent letters to the four companies seeking information on their New York revenue, the number of city-resident users, how their marketing operations work, and how they comply with consumer protection laws. According to the report, the letters included more than 60 questions.
Council inquiry adds another layer of New York scrutiny
The City Council’s move comes a little more than a week after New York Attorney General Letitia James sued Kalshi, alleging the company is illegally operating a gambling app. The article said James has not targeted Polymarket to date.
Menin also said the Council may consider legislation and plans to hold public hearings. While the Council cannot bring criminal charges, it can issue subpoenas to compel documents.
According to the report, Menin cited a June Wall Street Journal analysis of more than 1,100 Polymarket creator videos, instructional materials and influencer interviews. That report found 70% of the videos featured dummy sites Polymarket used to film fake trades. Menin also said some Polymarket ads may have targeted minors and that promotional videos appeared to show fake trades and promote insider trading on social media.
How the companies and regulators are responding
A Polymarket spokesperson said the company “looks forward to engaging with the City Council.” A Coinbase spokeswoman said the company “fully complies with applicable laws.” Kalshi declined to comment, and Gemini Titan did not respond, according to the report.
The story also lands amid a broader dispute over who regulates prediction markets. In response to the attorney general’s suit against Kalshi, CFTC spokesperson Brooke Nethercott said, “The New York State Attorney General does not set the rules for national derivatives markets” and added that authority is “the Congressionally mandated role of the CFTC.”
For New York users, the immediate takeaway is that scrutiny of prediction markets is increasing at both the city and state levels. What comes next will likely depend on whether the Council moves forward with subpoenas, hearings or legislation, and whether any new consumer protection measures are proposed.
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Source: As reported by nypost.com.
