New York City is investigating how prediction markets advertise—and its own memo says the inquiry will not touch the gambling-law question that four courts and a federal regulator are currently fighting over. Speaker Julie Menin’s office says the inquiry covers potentially false, deceptive, or abusive tactics, with particular concern for marketing directed towards young people.
Kalshi, Polymarket, Coinbase, and Gemini Titan have received letters from the New York City Council requesting information about their marketing practices, the Council announced on August 12.
Council Names the Regulatory Gap It Is Examining
The announcement states that key marketing restrictions and consumer protections governing casinos and online sports betting do not currently restrain prediction markets and describes that as adding to the necessity and urgency of the inquiry.
The Council says it aims to determine whether additional consumer protection legislation, enforcement, public education campaigns, health measures, and funding are necessary. It has been examining allegations of predatory marketing practices in the industry for months, according to the announcement, and a hearing is planned. No hearing date was given.
A memo attached to the letters states the inquiry is not exploring whether event contract exchanges violate New York State gambling laws, as CNBC reported.
Four Platforms Received Letters, One Faces Specific Allegations
The Council states it will examine allegations that Polymarket used or allowed social media influencers to entice young adults to bet on event contracts through false and deceptive marketing. The reported tactics it lists are undisclosed influencer marketing, videos depicting non-existent trades on websites designed to appear similar to Polymarket, fictitious depictions of profitable wagers that would have generated losses, and the promotion of insider trading.
The announcement describes these as allegations and reported tactics. It does not attribute equivalent conduct to Kalshi, Coinbase, or Gemini Titan and states that understanding whether such practices are prevalent across the industry is what the letters are intended to establish.
Menin Cites Consumer Affairs Background
Menin said in the announcement that prediction markets entice consumers to bet and wager on sports, politics, culture, and weather, and that she intends to harness the full power of the Council to protect New Yorkers from deceptive and predatory marketing practices. She described herself as a regulatory attorney and the former Commissioner of Consumer Affairs.
The announcement states that as Commissioner of the Department of Consumer Affairs, Menin oversaw investigations into for-profit colleges, fraudulent auto loans, illegal and unlicensed secondhand gun sellers, and debt collectors.
Council Member Harvey Epstein, chair of the Committee on Consumer and Worker Protection, said online prediction markets are surging in popularity, with some projecting $300 billion in volume on the platforms this year. The announcement does not identify the source of that projection. Council Member Shekar Krishnan chairs the Committee on Oversight and Investigations, and Deputy Speaker Nantasha Williams said the Council should hear from all stakeholders as the inquiry begins.
Inquiry Runs Separately From the State Litigation
New York State is in active litigation against Kalshi, Coinbase, and Gemini, alleging the companies are running illegal gambling operations. The state filed suits on April 21 against Coinbase Financial Markets and Gemini Titan, as reported by The Crypto Times. New York State is not in litigation against Polymarket.
The platforms have argued they are federally regulated financial exchanges and not subject to state betting laws. On August 11, the Commodity Futures Trading Commission exercised emergency authority under Section 8a(9) of the Commodity Exchange Act to direct Kalshi to continue operating after the exchange notified the Commission of a market emergency arising from New York’s restraining order motion.
Three of Four Platforms Are Crypto Companies
Polymarket operates on Polygon and uses USDC as its trading currency. Coinbase offers event contracts through a partnership with Kalshi. Gemini secured a designated contract market license in December 2025 and added a clearing license this spring, operating its prediction platform as Gemini Titan.
Polymarket was reported in August to be seeking about $1 billion at a valuation above $20 billion. The sector has drawn a series of new entrants, with Binance.US moving to seek its own CFTC license in July.
