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New York City opens investigation into prediction market exchanges’ advertising tactics

Legal Writer

Publish Date: Aug 13, 2026

Fact checked by: Matt Moreno

Key Points

Letters to Coinbase, Gemini Titan, Kalshi, and Polymarket call marketing practices “deceptive”
Probe only concerns exchanges’ marketing practices
Investigation begins as New York law enforcement is contesting legality of prediction market trading

Kalshi is already engaged in a court case over its ability to offer several types of event contracts in New York, but it and other prediction market exchange operators now also face an inquiry into how they advertise those contracts from authorities in the state’s most-populated city. New York City Council Speaker Julie Menin confirmed on Wednesday that the council is looking into whether Coinbase, Gemini Titan, Kalshi, and Polymarket may have violated any laws with their marketing.

The investigation could add to the potential financial liability that Kalshi faces if New York’s lawsuit succeeds and spur further enforcement action across the United States. However, Polymarket seems to be the main point of interest in the inquiry.

The Empire State Building and JPMorgan Chase Building in New York City illuminate in the colors of the New York Knicks behind the Statue of Liberty during Game 5 of the NBA Finals on June 13, 2026, as seen from Bayonne, New Jersey.

(Photo by Gary Hershorn/Getty Images)

NYC Council announces investigation into prediction market advertising

According to a Wednesday statement, the council is looking into allegations of “false, deceptive, unconscionable, and objectionable marketing practices” by the quartet of exchange operators. The inquiry will include a public hearing during which representatives of the exchange operators are likely to face direct questioning from council members.

According to Davis Giangiulio of CNBC, Coinbase, Kalshi, and Polymarket have all responded that they intend to comply with the probe. The scrutiny could be most intense for Polymarket.

Statement calls out Polymarket influencer campaigns

Menin’s statement calls out revelations from a 2025 Wall Street Journal report that showed how Polymarket paid owners of popular social media accounts to post content claiming that they had profited off trading on Polymarket when they made those trades using funds provided by Polymarket without disclosing that fact.

“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.”

All four investigation subjects could face fines and sanctions for possible legal violations, but the statement points to other action.

“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.”

If the council takes those measures against Kalshi, that compounds the company’s problems in New York.

Kalshi faces separate lawsuit over legality of event contracts in New York

Kalshi has already been embroiled in litigation from the New York attorney general’s office concerning the legality of its most popular event contracts, including politics and sports. It was able to remove that case to federal court, but a remand petition is before the court to return the case to the state court where it originated.

Additionally, the United States Commodity Futures Trading Commission (CFTC) requested that a federal judge issue a restraining order preventing New York continuing with that litigation, but the judge declined. New York is seeking at least $36 billion in damages in the suit and a declaration that the affected event contracts violate New York’s gambling laws.

Fines from New York City could add to the liabilities for Kalshi and motivate authorities in other municipalities to open similar inquiries. Coinbase, Gemini, and Polymarket are not yet the targets of enforcement actions by state officials, but that could follow successful litigation against Kalshi.

The bottom line is that despite the fact that three of these four companies make their U.S. headquarters in New York, executives in these companies probably won’t be buying any “I Love New York” merchandise anytime soon.

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