The New York City Council has opened an investigation into the advertising practices of four prediction market platforms: Coinbase, Kalshi, Polymarket, and Gemini. The probe follows reports that Polymarket used deceptive ads to target U.S. users. It also comes as New York state steps up its own enforcement in the sector.
Why the ads drew scrutiny
Earlier reports detailed how Polymarket's advertising misled users about the nature of its products. Those reports prompted the council to look at how all four companies market their prediction markets. The council did not specify the exact concerns, but the investigation is tied to the earlier reports.
The companies have not publicly commented on the investigation. The council has not released details about what it will examine, but the focus is on advertising practices.
The companies in the crosshairs
Coinbase, Kalshi, Polymarket, and Gemini are all active in the prediction market space, though their business models differ. Each operates a platform where users can trade on the outcome of future events, from elections to economic data. The council's investigation will look at how these platforms present their services to potential customers.
Polymarket has been the subject of previous scrutiny over its marketing tactics. The earlier reports of deceptive ads targeting U.S. users appear to be the trigger for this broader inquiry.
A wider state crackdown
The city's investigation is not happening in a vacuum. New York state has been tightening its oversight of prediction markets and related financial products, though the details of that crackdown were not immediately clear. The council's move suggests that regulators at both the city and state level are paying closer attention to how these platforms advertise.
The investigation is still in its early stages. The council has not announced a timeline for its work or what actions it could take against the companies. It's unclear whether the probe will lead to new rules, fines, or other penalties.
