New York City Council Investigating Prediction Market Operator Marketing Practices

• New York City Council today announced an investigation into major prediction market operator marketing practices
• The council will evaluate marketing practices for potentially false, deceptive, or abusive tactics
• The investigation particularly focus on marketing directed towards young people

The New York City Council today announced a new investigation into the marketing practices and strategies of prediction market companies in the city.

The members of the council announced today a new inquiry focused on prediction market operator marketing and advertising practices. The investigation will focus on marketing practices that include potentially false, deceptive, or abusive marketing tactics, with a particular interest for marketing directed event contracts towards young people.

“As a mother of four, I know firsthand the fears that come with raising kids in a world where predatory industries are constantly finding new ways to target them,” New York City Council Speaker Julie Menin said in a press release. “Prediction markets aggressively entice consumers to bet and wager on sports, politics, culture, weather, and pretty much anything. We refuse to let New Yorkers, especially our young people, become collateral damage. As a regulatory attorney and the former Commissioner of Consumer Affairs, I take consumer protection extremely seriously. I intend to harness the full power of the Council to protect New Yorkers from deceptive and predatory marketing practices by prediction market platforms.”

Investigating Harmful Marketing Practices

The New York City Council revealed it has been evaluating issues related to allegations of predatory marketing practices in connection with prediction market companies for months in New York City. The investigation will determine whether additional consumer protection legislation, enforcement, public education campaigns, health measures, and funding are necessary to protect New York consumers.

The New York City Council sent letters announcing the investigation to Kalshi, Polymarket, Coinbase, and Gemini Titan. The city council requested specific marketing practices from each of these platforms in the letters.

“Good government requires us to ask questions, examine the facts, and make informed decisions, particularly as new and emerging industries reach more New Yorkers,” Deputy Speaker Dr. Nantasha Williams said. “We also have to recognize the potential harms associated with these platforms, particularly when it comes to young people, compulsive wagering, and how these products are marketed to consumers. As the Council begins this inquiry, it is important that we hear from all stakeholders, deepen our knowledge of this emerging market, examine the practices and potential impacts at issue, and allow that information to guide our work. New Yorkers deserve a process that takes these concerns seriously, follows the facts, and allows us to determine the appropriate path forward.”

Polymarket Called Out by Council

The investigation will also examine allegations that Polymarket used or allowed social media influencers to attract young adults to bet on event contracts through false and deceptive marketing.

The investigation comes after a published Wall Street Journal report earlier this summer, alleging Polymarket conducted a misleading marketing campaign which showed content creators winning trades when they were not actually putting any money at risk.

The Wall Street Journal published reports of phony trades made on fake sites makes to resemble Polymarket’s platform in company advertising. One such video showed a college student winning $100,000 after placing a $1,000 bet on President Donald J. Trump saying the word “McDonald’s” during the month of the transaction.

However, according to the Wall Street Journal, in actuality 50 accounts made that bet on Polymarket’s platform during the same month and all of them lost when President Trump never said the word “McDonald’s.”

The Wall Street Journal reviewed 1,105 videos created by 10 creators tied to Polymarket’s marketing vendor, with 70% of them featuring a creator making a trade. The on-screen trades totaled $1.9 million, with 118 videos showing these creators winning nearly $900,000.

None of the bets were real, the Wall Street Journal reported, and if those same bets had been made with real money they would have actually lost more than $166,000.

“Apps like Polymarket are expanding rapidly unchecked,” Council Member Shekar Krishnan, chair of the Committee on Oversight and Investigations, said. “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. I’m proud to join Speaker Menin in having launched this investigation and taking swift action before it’s too late. As Oversight and Investigations Chair, I will hold these corporations responsible and end the deception that is screwing over New Yorkers.”