The New York City Council has opened an investigation into the marketing practices of prediction market platforms, extending scrutiny of the sector beyond the ongoing dispute over whether event contracts fall under federal derivatives regulation or state gambling laws.
Speaker Julie Menin sent information requests to Kalshi, Polymarket, Coinbase and Gemini Titan. The Council said it will examine potentially false, deceptive or abusive advertising alongside marketing that may reach minors or people susceptible to compulsive wagering.
The investigation follows reporting on Polymarket's use of social media creators. A Wall Street Journal investigation identified more than 1,100 promotional videos and found that over 70% featured trades conducted through replica websites rather than the platform itself. Some content depicted profitable wagers that would have produced losses if placed as shown.
The Council is examining whether those practices are present more broadly across prediction markets and whether additional city legislation, enforcement measures or consumer education initiatives are required. Polymarket has been asked to respond to questions about its marketing practices within 14 business days.
The inquiry arrives during rapid expansion of federally regulated event-contract products. Gemini Titan received CFTC designation as a contract market in December 2025 and subsequently introduced sports event contracts, while Coinbase has expanded its relationship with Kalshi as prediction markets become part of its broader financial product offering.
Federal oversight is also evolving. The CFTC opened a rulemaking process on prediction markets in March, seeking public input on how existing statutory principles and regulations should apply to event contracts. Its enforcement division separately issued an advisory after cases involving fraud and misuse of non-public information on Kalshi.
That federal framework increasingly conflicts with state efforts to treat sports event contracts as gambling. A federal court in New York rejected Kalshi's request for preliminary relief in July, finding it had not shown that federal commodities law pre-empted the state's gambling restrictions.
On August 12, the CFTC invoked emergency authority after New York's legal action against Kalshi raised the prospect of disruption to its event-contract operations. The intervention followed Attorney General Letitia James' lawsuit alleging that Kalshi operates an unlicensed gambling business in the state.
Gemini Titan became a CFTC-designated contract market in December 2025 following a licensing process that began in 2020
