New York City Council opens probe into prediction market platforms

The New York City Council has opened a probe into four prediction market platforms over alleged "false, deceptive, or abusive marketing tactics" targeting younger people.The council sent letters to Kalshi, Polymarket, Coinbase, and Gemini Titan, according to a statement on Wednesday."For months, the Council has been looking into issues related to allegations of predatory marketing practices associated with the prediction market industry, which has grown rapidly in New York City," the council said in the statement. "Some of these practices raise serious concerns."State officials across the country have increasingly raised concerns about prediction markets, an industry now valued at billions of dollars. Much of the concern has centered on platforms offering sports-related contracts, which states argue can amount to gambling and violate their gaming laws.Insider trading has also emerged as a concern. In April, New York Gov. Kathy Hochul signed an executive order prohibiting state employees from using confidential government information to bet on prediction markets.The Council said it would look into allegations that Polymarket paid social media creators to film themselves placing fake bets and wins on replicas of the site, which The Wall Street Journal reported in June.Kalshi and Gemini Titan did not immediately respond to a request for comment.A Polymarket spokesperson said the company looked forward to "engaging with The New York City Council."A Coinbase spokesperson said the company follows the law."Coinbase offers our customers access to federally regulated prediction markets overseen by the CFTC [Commodity Futures Trading Commission], and fully complies with applicable laws," the Coinbase spokesperson said in an emailed statement.On Tuesday, CNBC reported that Polymarket is working with a third-party consulting firm to oversee content released by promotion partners. The firm also introduced a new structure for its marketing team, according to CNBC.Protecting consumersThe new probe comes a day after the Commodity Futures Trading Commission used its emergency authority to order Kalshi to continue operating, even after the company was sued last month by the state of New York. Last month, New York Attorney General Letitia James sued Kalshi, alleging it was operating an illegal gambling business. She requested a temporary restraining order to stop the company from operating in New York, along with restitution for users, disgorgement of profits, and civil penalties that could total at least $36 billion.The CFTC has argued that it has "exclusive jurisdiction" over prediction markets, including sports-related contracts, and has sued several states as the federal government and state regulators clash over how the industry should be regulated.On Wednesday, NYC Council Member Harvey Epstein raised the possibility of legislation aimed at protecting consumers."With the industry aggressively marketing to New Yorkers, we have a responsibility to investigate their claims and the advertising tactics these companies are using to ensure they are following the law," Epstein said in the statement.Updated at 4:45 p.m. UTC to include commentsDisclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.