The New York City Council has opened an investigation into Kalshi, Polymarket, Coinbase and Gemini Titan over claims the platforms use predatory marketing to pull in young users. Speaker Julie Menin sent letters to all four companies this week, giving them 14 days to disclose user numbers, marketing methods and revenue generated in the city.
What the letters demand
Menin's letters ask for specifics. The inquiry targets marketing that may be false, deceptive or abusive, with a particular eye on ads aimed at young people. The Council noted that the marketing restrictions and consumer protections that apply to casinos and licensed sportsbooks don't cover these platforms. Menin said the Council would use its full power against predatory marketing.
The influencer problem
The Council will investigate claims that Polymarket used influencers to draw young adults into wagering through misleading marketing. That includes undisclosed promotions, fake trades, staged wins and encouragement of insider trading. Harvey Epstein, chair of the Committee on Consumer and Worker Protection, cited forecasts of $300 billion in annual prediction market volume.
A growing legal pile
New York State Attorney General Letitia James sued Kalshi in July and Coinbase and Gemini in April. Kentucky's attorney general sued Kalshi and Polymarket in June. Wisconsin's DOJ brought a case against Kalshi, Robinhood, Coinbase, Polymarket and Crypto.com. The CFTC sued New York in April over state gambling enforcement, arguing federal law overrides state statutes.
The preemption question
The harder question is whether New York can write advertising rules that survive a federal preemption challenge. The CFTC's suit already argues that federal law trumps state gambling enforcement. That legal fight could shape how far the Council can go. Responses to the Council are due within two weeks.
