NYC Council zeroes in on prediction market ads aimed at young users

The New York City Council has opened an investigation into the marketing practices of prediction market platforms, with Speaker Julie Menin saying the review covers Polymarket, Kalshi, Coinbase and Gemini Titan. The Council says it is focused on deceptive and predatory advertising, especially campaigns that may be aimed at young adults and minors.

According to the Council’s press release, the inquiry centers on allegations that Polymarket used or allowed false and deceptive marketing to lure people into betting on event contracts. The reported tactics include undisclosed influencer marketing, videos showing non-existent trades on sites made to look like Polymarket, fictitious profitable wagers that would actually have lost, and promotion of insider trading.

Menin’s letters say the Council has been examining allegations of “false, deceptive, unconscionable, and objectionable marketing practices” for months. In the memo attached to the letters, the Council said the allegations create an urgent need to decide whether new legislation or other policy changes are necessary, and made clear that the inquiry is not about whether event contract exchanges violate New York’s state gambling laws.

The Council is also looking at whether it should use consumer-protection tools, public education, enforcement and other resources to curb abusive marketing. Its press release says it is considering whether additional consumer protection legislation, enforcement, education campaigns, health measures and funding are needed, and it plans to hold a hearing.

Quartz reported that the letters contain more than 60 questions and give the companies 14 days to respond. The Council is seeking information going back to 1 January 2025 on the number of New York users, their ages and demographics, how much money city residents have won or lost, and details of how the firms advertise, including what they pay influencers and how effective that marketing is at drawing younger users.

The probe comes after a June Wall Street Journal investigation into Polymarket’s creator videos. Quartz said the Council’s letters cite that reporting, which looked at more than 1,100 videos and found that roughly seven in ten showed staged trades filmed on counterfeit versions of the platform. CNBC also reported that Polymarket has moved to revamp its marketing guidelines for staff and content creators, while Polymarket said it looks forward to engaging with the Council and would audit its promotional content.

The inquiry arrives against a broader legal backdrop. In April, New York Attorney General Letitia James sued Coinbase and Gemini over what her office described as illegal gambling operations, alleging that their prediction markets were open to users aged 18 to 20 even though New York requires participants in mobile sports betting to be at least 21. Her office also said it was seeking fines, forfeiture of illegal profits and restitution to customers.

The Council’s probe is separate from those gambling-law fights. It is aimed instead at how the platforms are sold to the public, and at whether New York City needs tougher rules to protect consumers from marketing that officials say may be abusive.