NYC Council investigates Polymarket, Kalshi over deceptive marketing

NYC Council investigates Polymarket, Kalshi over deceptive marketing

Wed, August 12, 2026 at 4:28 PM GMT+3 2 min read

New York City Council Speaker Julie Menin announced an investigation on Wednesday into the marketing and advertising practices of four prediction market platforms operating in New York City: Polymarket, Kalshi, Coinbase, and Gemini Titan.

The letters contained more than 60 questions on topics ranging from New York revenue figures and local user counts to the mechanics of each company's marketing operations, according to the Wall Street Journal. The companies have 14 days to respond.

The investigation centers on allegations of false, deceptive, and abusive marketing tactics, with particular concern for practices directed at young people and those with addictive tendencies, the Council said. The inquiry will also examine whether marketing restrictions that apply to casinos and online sports betting should be extended to prediction markets.

The Council's probe focuses heavily on Polymarket's influencer marketing practices. Allegations include undisclosed influencer partnerships, videos depicting non-existent trades on sites designed to look like Polymarket, fictitious depictions of profitable wagers that would have generated losses, and promotion of insider trading. The letters cited a June Wall Street Journal report that examined over 1,100 Polymarket creator videos and determined that roughly seven in ten showed staged trades filmed on counterfeit versions of the platform.

In response, Polymarket said it "looks forward to engaging with the New York City Council on this matter." A Coinbase spokesperson said the company "fully complies with applicable laws." Kalshi spokesperson Dani Lever said the company looks "forward to educating the New York City Council about our business model and practices." Gemini Titan did not respond to a request for comment, according to CNBC.

The Council said it plans to hold a public hearing and is considering legislation that could authorize enforcement actions, public education campaigns, and health measures. While the Council cannot bring criminal charges, it holds subpoena power to compel companies to produce documents, authority it has used on private firms.

The investigation is separate from ongoing state-level legal battles. New York state has filed suit against Kalshi, Coinbase, and Gemini on grounds that those platforms constitute unlawful gambling businesses, according to CNBC. The platforms maintain they are federally regulated financial exchanges not subject to state betting laws. On Tuesday, the Commodity Futures Trading Commission invoked emergency authority to direct Kalshi to maintain normal operations under federal commodity law, a move made in direct response to Attorney General Letitia James's complaint against the company.

Council Member Harvey Epstein, chair of the Committee on Consumer and Worker Protection, noted that some projections place prediction market volume at $300 billion this year.