The New York City Council has launched an investigation into companies offering prediction market services to determine whether they used influencers to attract young people through "false and misleading marketing."
In a notice published on Wednesday, the City Council stated that Speaker Julie Menin had sent letters to the companies Kalshi, Polymarket, Coinbase, and Gemini Titan as part of an investigation into their "aggressive marketing" through the prediction markets of these platforms. Following the investigation, New York City authorities will decide whether additional measures against such marketing practices are needed, including legislative initiatives, public education, and law enforcement.
"Apps like Polymarket are expanding without any control," said City Council member Shekar Krishnan, chairman of the Committee on Oversight and Investigations. "Their unprecedented reach is explained by the fact that they lure young people and minors with misleading, and sometimes outright false, marketing tactics, and then squeeze them for everything they're worth."
The New York investigation is the latest step in a situation that many believe could escalate into a legal confrontation between state regulators and U.S. federal regulators over the offerings of prediction markets, including contracts related to sporting events. While many state gambling regulatory authorities argue that the companies are illegally offering sports betting, the Commodity Futures Trading Commission (CFTC) considers these transactions "swaps," falling under its jurisdiction as a regulator of commodity markets.
Cointelegraph reached out to Gemini for comment on the investigation but did not receive an immediate response. A Coinbase representative stated that the company "provides [its] clients with access to federally regulated prediction markets, supervised by the [Commodity Futures Trading Commission], and fully complies with applicable laws," while a Polymarket representative said the company "looks forward to discussing this matter with the New York City Council."
Related: Judge Pauses CFTC Case Against U.S. Service Member Over Prediction Market Bets
