Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—New York City Council investigating prediction markets over ‘predatory marketing‘, (Aug 13, 2026)
The Council cited allegations that Polymarket reportedly engaged in an elaborate marketing scheme involving fictitious trades and undisclosed influencer marketing.
The New York City Council announced it is investigating four major prediction market platforms due to “serious concerns” about potentially deceptive marketing practices. The council has sent letters requesting information from Kalshi, Polymarket, Coinbase, and Gemini Titan.
The Council seeks details on the platforms’ marketing and advertising practices, with particular focus on potentially false, deceptive, or abusive tactics and marketing aimed at young people.
“Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather, and pretty much anything,” said Speaker Julie Menin. “We refuse to let New Yorkers, especially our young people, become collateral damage.”
“Apps like Polymarket are expanding rapidly unchecked,” said Council Member Shekar Krishnan, chair of the Committee on Oversight and Investigations. “Their unprecedented reach is because they are preying on young adults and minors with deceptive and sometimes outright false marketing tactics that pull them in and wring them dry.”
Consumer protection concerns. Key consumer protections that govern casinos and online sports betting do not apply to prediction markets, the Council said.
As some project that prediction market volume will reach $300 billion this year, the Council must ensure the platforms are following the law, said Council Member Harvey Epstein, chair of the Committee on Consumer and Worker Protection.
Polymarket campaign. The inquiry will examine allegations reported in the Wall Street Journal that Polymarket used or allowed social media influencers to entice young adults to bet on event contracts through false and deceptive marketing. The tactics reportedly include undisclosed influencer marketing, videos depicting non-existent trades on websites designed to appear similar to Polymarket, fictitious depiction of profitable wagers that actually would have generated losses, and the promotion of insider trading.
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