Key facts
- The NYC Council is investigating Polymarket, Coinbase, Kalshi, and Gemini for their marketing practices.
- Allegations include deceptive advertising and predatory marketing targeting young people.
- Polymarket is specifically accused of using undisclosed influencer marketing and misrepresenting trades.
- The investigation is examining whether new consumer protection legislation is needed.
- This probe occurs concurrently with New York State's crackdown on these platforms for violating gambling laws.
The New York City Council, led by Speaker Julie Menin, has initiated an investigation into the marketing and advertising practices of prediction market platforms, including Polymarket, Coinbase, Kalshi, and Gemini. The probe specifically targets allegations of false, deceptive, or abusive marketing tactics, with a particular concern for those directed at young people.
This investigation follows reports that Polymarket engaged in deceptive marketing, such as using fake winnings to lure users and employing undisclosed influencer marketing. The Council is examining claims that Polymarket used social media influencers to entice young adults with false and deceptive marketing, including misrepresenting profitable wagers and promoting insider trading.
The NYC Council stated that it has been looking into these allegations for months and aims to determine if additional consumer protection legislation, enforcement, or public education campaigns are necessary. This action by the city council occurs concurrently with New York State's ongoing crackdown on these platforms for allegedly violating state gambling laws. Notably, the state has sued Coinbase, Kalshi, and Gemini, though the CFTC has ordered Kalshi to continue operating in the state despite the lawsuit, asserting federal authority over prediction markets.
Polymarket has been given 14 business days to respond to the Council's inquiries regarding its marketing practices.