New York City’s legislative body to assess the need for new legislation to protect consumers from “deceptive and predatory” marketing practices
The New York City Council has opened an investigation into the marketing and advertising practices of four of the leading prediction market platforms.
Speaker Julie Menin has sent letters to Kalshi, Polymarket, Coinbase and Gemini Titan, requesting information about practices their marketing and advertising practices in the city, including potentially false, deceptive, or abusive marketing tactics, with particular concern for marketing directed towards young people.
The Council has been looking into issues related to allegations of predatory marketing practices associated with the prediction market industry, which has grown rapidly in New York City and raised serious concerns.
Ultimately, the Council aims to determine whether additional consumer protection legislation, enforcement, public education campaigns, health measures, and funding are necessary to protect New York City consumers from abusive marketing.
“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,” said Menin. “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.”
Deputy Speaker Dr. Nantasha Williams commented: “Good government requires us to ask questions, examine the facts, and make informed decisions, particularly as new and emerging industries reach more New Yorkers. 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.”
As part of its investigation, the Council will examine allegations that Polymarket used or allowed social media influencers to entice young adults to bet on “event contracts” through false and deceptive marketing.
These reported tactics 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.
The Council said that understanding whether such marketing practices are prevalent within the prediction market industry is critical to determining what legislation, regulations, and programs are needed.
It cited the fact that key marketing restrictions and consumer protections that govern casinos and online sports betting do not currently restrain prediction markets, adding to the necessity and urgency of the Council’s inquiry.
“Online prediction markets are surging in popularity, with some projecting $300 billion in volume on the platforms this year,” said Council Member Harvey Epstein, chair of the Committee on Consumer and Worker Protection. “With the industry aggressively marketing to New Yorkers, we have a responsibility to investigate their claims and the advertising tactics these companies are using to ensure they are following the law.
“I look forward to working with the Speaker and my colleagues to assess the need for new legislation to protect consumers from predatory advertising and the potentially addictive nature of prediction markets. I thank Speaker Menin and the Council’s Oversight and Investigations Division for taking a proactive approach to protecting New Yorkers.”
Council Member Shekar Krishnan, chair of the Committee on Oversight and Investigations, added: “Apps like Polymarket are expanding rapidly unchecked. 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.”
Kalshi, Coinbase and Gemini Titan are currently being sued by New York Authorities for operating illegal gambling businesses in the state.
Earlier this week, the US Commodity Futures Trading Commission ordered Kalshi to continue its operations in New York, after Kalshi notified the Commission of legal action by the state.