The New York City Council, led by Speaker Julie Menin, is probing the marketing strategies of several prediction market platforms after receiving complaints about potentially misleading practices.
The investigation follows a report by The Wall Street Journal, which accused Polymarket of creating the false impression that partnered content creators were winning on the platform using their own funds. This has prompted the Commodity Futures Trading Commission to investigate Polymarket as well.
Menin's letters to the platforms indicate a broader concern about whether similar deceptive advertising tactics are employed by other companies in the sector. While the inquiry does not focus on potential violations of New York's gambling laws, the state is currently involved in litigation against Kalshi, Coinbase, and Gemini, alleging illegal gambling operations.
These companies maintain that they operate as federally regulated financial exchanges. The outcome of this investigation and any subsequent hearings could significantly impact the marketing practices and regulatory landscape for prediction markets in New York and potentially beyond