New York City Council Probes Prediction Markets Over Advertising and Compulsive Wagering Risks

New York City’s Council has opened a legislative inquiry into how prediction-market platforms advertise to residents and whether existing city laws protect consumers from deceptive marketing. Speaker Julie Menin sent questions to Polymarket, Kalshi, Coinbase’s prediction-market business and Gemini Space Station’s Titan platform, according to Fortune and Bloomberg.

The inquiry covers four major operators and focuses on marketing practices, user protections and alleged social harms. It also examines whether the city needs new rules for products aimed at people who could engage in compulsive wagering on event contracts. CNBC separately described the action as a probe into the platforms’ marketing strategies, reinforcing the focus on promotion rather than the legality of individual contracts.

Kalshi and Polymarket received 14 days to provide information on New York users, including ages and how much residents have won or lost since last year. The requested data would give lawmakers a clearer view of who is participating and the financial outcomes associated with the platforms, while placing new pressure on companies operating in the city.

The council also asked for information from Coinbase Global and Gemini Space Station’s Titan platform. Polymarket said it looked forward to engaging with the council. The other companies had not immediately responded when Fortune published its account. Bloomberg’s report identified the same city investigation, while CNBC’s headline emphasized the marketing-strategy component.

Prediction markets have expanded into a multibillion-dollar industry by offering contracts tied to political, economic, geopolitical, entertainment and sports outcomes. Sports contracts account for a large share of trading, placing the platforms at the center of a broader dispute over whether event contracts function as financial products or gambling.

That classification matters because the platforms and the Commodity Futures Trading Commission, the federal derivatives regulator, maintain that event contracts are financial instruments distinct from gambling. New York City’s inquiry brings a separate consumer-protection question into the fight: even if a contract is treated as a financial product, advertising and product design can still raise concerns about misleading claims or compulsive use.

The requested age and profit-and-loss information gives the council a way to connect marketing practices with actual participation patterns. Lawmakers are examining whether residents under financial or behavioral risk are being reached by promotions and whether losses are concentrated among particular groups.

The inquiry follows allegations involving Polymarket and asks whether similar practices extend across the wider prediction-market industry. It also reflects the platforms’ shift from niche forecasting tools toward products linked to highly visible events, including sports contests and major news developments. The findings could influence how New York approaches disclosures, targeting, age checks and warnings for event contracts.

The immediate deadline is the council’s 14-day request for information from Kalshi and Polymarket. Companies’ responses will shape whether the inquiry remains an information-gathering exercise or becomes the basis for city legislation targeting advertising, consumer disclosures or access by vulnerable users.

The investigation adds municipal scrutiny to an industry already facing federal regulatory disputes and pressure over sports-related contracts. New York City cannot resolve the federal question of whether event contracts are derivatives or gambling, but it can examine how platforms market those products to residents. The council’s next steps will depend on the data provided and on whether lawmakers find common practices across the four platforms.