New York City Council members have opened an inquiry into the marketing strategies of several prediction market platforms, citing concerns over potentially deceptive advertising aimed at drawing in consumers. The effort targets Polymarket, Kalshi, Coinbase and Gemini Titan, and centers on how these firms promote event contracts linked to sports, politics, culture, weather and other topics.

Council Speaker Julie Menin stated that the review has been underway for several months and addresses allegations of false, deceptive, unconscionable and objectionable marketing practices within the sector. Letters have been sent to the companies requesting details on their advertising approaches. A hearing is planned as lawmakers assess whether current consumer protection measures suffice or if new rules or policy steps are required.

Menin indicated she intends to use the council’s authority to shield New Yorkers from what she characterized as deceptive and predatory marketing.

Allegations Centered on Influencer Promotions

The inquiry draws partly from reports about Polymarket’s promotional activities. Those accounts described arrangements in which the platform worked with content creators who produced videos appearing to show real trades and earnings. In reality, many of the depicted bets were simulated or fabricated rather than actual market positions funded by the creators.

Creators were reportedly compensated between $2,000 and $3,000 per month through a marketing contractor and directed not to disclose the paid nature of the partnerships. One review of more than 1,100 videos posted over several months found that roughly 70 percent involved simulated activity. The displayed simulated bets totaled about $1.9 million, with nearly $900,000 presented as winnings that would have produced losses if executed on the live platform. Another accounting identified 118 such videos. Analytics estimates put the collective reach of the content above 140 million views across major social platforms.

Polymarket has said it is auditing its promotional materials for compliance with internal standards and disclosure rules. The company has also revised guidelines for employees and creators involved in marketing. A spokesperson noted the firm looks forward to engaging with the City Council on the matter.

Broader Industry Review and Separate Legal Actions

Council materials make clear that the examination extends beyond any single firm. Officials are seeking to determine whether similar advertising methods appear across the prediction market sector. The scope remains limited to marketing and consumer protection questions. It does not address whether event-contract platforms violate New York gambling statutes.

That distinction separates the city probe from ongoing state litigation. New York Attorney General Letitia James has sued Coinbase Financial Markets and Gemini Titan, alleging the companies operated unlicensed prediction market businesses in breach of state gambling and licensing requirements. Court materials referenced claims seeking substantial financial recoveries. Kalshi faces parallel state challenges, including over sports-related contracts. A federal judge earlier denied Kalshi a preliminary injunction in one of those matters, allowing the case to proceed.

Coinbase has maintained that its offerings involve federally regulated prediction markets overseen by the Commodity Futures Trading Commission and that it complies with applicable laws. A Kalshi spokesperson said the company looks forward to educating the Council about its business model and practices.

Polymarket’s situation differs in key respects. Following a 2022 settlement with the Commodity Futures Trading Commission that included a $1.4 million penalty, the platform agreed to wind down noncompliant markets and has restricted U.S. users from its primary service. Marketing content, however, has continued to reach American audiences. The company, its chief executive Shayne Coplan and its chief marketing officer Matthew Modabber also face a separate consumer protection lawsuit filed in June by the National Association of Consumer Advocates over the influencer campaigns. New York State Assemblymember Clyde Vanel has introduced legislation seeking to restrict certain prediction market activities, citing risks of manipulation and addiction.

Federal authorities are conducting their own examinations of Polymarket covering marketing practices along with other business and market integrity questions. The City Council process thus adds a municipal layer of scrutiny at a time when prediction markets confront overlapping regulatory attention at multiple levels of government.