Full Breakdown
NYC Council Launches Probe into Prediction-Market Marketing Practices
8/14/2026, 9:32:41 PM
Core Investigation: Alleged Deceptive Marketing and Youth Targeting
New York City Council Speaker Julie Menin sent letters to four prediction-market platforms—Polymarket, Kalshi, Coinbase and Gemini Titan—demanding detailed answers about their advertising methods, earnings from New York users, and safeguards for under-age participants. The council’s inquiry focuses on whether the firms employ “false, deceptive, unconscionable, and objectionable” marketing, a concern amplified by a Wall Street Journal report that described Polymarket’s promotional videos as showing fabricated trades. The council plans public hearings but is not assessing whether the platforms violate state gambling statutes.
Background & Context
The WSJ investigation triggered a Commodity Futures Trading Commission (CFTC) review of Polymarket, and the New York Attorney General Letitia James sued Kalshi earlier this year, alleging the company runs an illegal gambling app and seeking $36 billion in damages. State litigation against Kalshi, Coinbase and Gemini is ongoing, while Polymarket has not been sued by the attorney general. The CFTC maintains exclusive authority over derivatives-type event contracts, a stance that clashes with the state-level actions.
Data & Statistics
- Trading volume: DeFi Llama data cited by *The Market Periodical* shows Kalshi’s weekly volume at over $2.48 billion, a modest decline from the prior week’s $2.54 billion and down from a World-Cup peak above $3 billion. Polymarket’s weekly volume fell to $471 million, down from a peak of more than $1.2 billion.
- Fundraising: Kalshi raised $1 billion at a $22 billion valuation in May and is reportedly discussing a new round that could value the company near $40 billion. Polymarket is exploring a roughly $1 billion round that could push its valuation above $20 billion.
Official Statements & Responses
- Polymarket indicated it will cooperate with the council, emphasizing a revamp of its marketing department and the hiring of former e-scooter founder Travis VanderZanden as head of growth.
- Kalshi said it looks forward to educating council members about its business model, while Gemini Titan did not respond to requests for comment.
Verbatim Quotes
- “Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather, and pretty much anything,” — Council Speaker Julie Menin
- “Coinbase offers our customers access to federally regulated prediction markets overseen by the CFTC, and fully complies with applicable laws.” — Coinbase spokesperson
- “The New York State Attorney General does not set the rules for national derivatives markets,” — The CFTC
What’s Next
The council intends to hold public hearings and is weighing legislation that could expand enforcement powers, launch public-education campaigns, and allocate funds toward protecting younger users. The outcome may shape how prediction-market platforms market their services and interact with both state and federal regulators.
