New York City Council opens probe into Polymarket, Kalshi, Coinbase and Gemini Titan over marketing practices

The New York City Council has launched an investigation into four prediction markets over alleged deceptive marketing and possible targeting of minors, according to The Wall Street Journal. For high-risk payments and crypto operators, the message is simple: if your product touches New York and your acquisition tactics look like they were assembled by an overenthusiastic affiliate team, expect questions.

1. City Council Speaker Julie Menin sent letters to Polymarket, Kalshi, Coinbase and Gemini Titan asking how the platforms comply with consumer protection laws. The four companies all have a presence in New York City, which is the bit that turns this from a generic compliance headache into a local enforcement problem.
2. The probe focuses on alleged deceptive marketing practices and the companies’ targeting of minors. In Menin’s letter to Polymarket, she asked for details about promotional videos that appeared to depict fake trades. She wrote that “troubling news reports allege that Polymarket conspired with marketing agents and social media influencers to target young adults—and thus potentially minors—with false, deceptive and unconscionable advertising.”
3. In June, the WSJ analyzed more than 1,100 videos made by Polymarket creators and found that 70% featured phony sites used by the company to film fake trades. Polymarket previously said it was “committed to maintaining accurate, fair and transparent markets” and said it would audit its promotional content.
4. Polymarket and Kalshi said they look forward to engaging with the city council, while a Coinbase spokesperson said the company “fully complies with applicable laws.” Gemini did not respond to the WSJ’s or PYMNTS’ request for comment.
5. The New York City probe lands two weeks after New York State filed a lawsuit against Kalshi, saying the company operates an illegal gambling platform and seeking damages of up to $36 billion. Governor Kathy Hochul said Kalshi had “chosen to ignore New York’s gaming laws,” while Kalshi said it expected the action and moved to shift the case to federal court, calling the suit “political theater from the leadership in our own state.”

For PSPs, acquirers and banks, the practical takeaway is not just about prediction markets themselves. When a product class is already being tested on consumer protection and gambling rules in one New York forum and gaming law in another, the marketing files, influencer trails and customer targeting logic tend to matter as much as the transaction flow.