New York City Council probes Polymarket, Kalshi, Coinbase and Gemini Titan over 'deceptive and predatory' marketing

Council scrutiny centers on marketing

New York City Council is investigating marketing by Polymarket, Kalshi, Coinbase and Gemini Titan, according to BANKBIT. Council Speaker Julie Menin notified the companies on Tuesday, raising concerns that prediction-market promotions could encourage gambling among young adults and potentially minors.

BANKBIT reports that Menin’s letter to Polymarket, seen by Bloomberg, cited allegations of undisclosed influencer payments, videos depicting fabricated trades, losing bets portrayed as successful and encouragement of insider trading. In a Wednesday statement, Menin emphasized consumer protection, particularly for younger New Yorkers. These are allegations underlying the inquiry, not established findings.

Trading growth brings integrity concerns

BANKBIT puts combined annual trading volume at Kalshi, Polymarket, Coinbase and Gemini Titan at $240 billion. Their contracts cover subjects including sports, politics, culture, weather and world events, with concerns about access to nonpublic information accompanying the industry’s expansion.

The report cites an investigation into a White House staffer accused of betting with advance knowledge of US President Donald Trump’s remarks. It also describes the arrest of a US special forces soldier accused of using classified Pentagon information to earn $400,000 by predicting Venezuelan President Nicolas Maduro’s removal from power in January.

During the US-Israeli war on Iran, The Guardian identified more than $1 billion in suspiciously timed wagers, according to BANKBIT. Those included an $850,000 bet shortly before US strikes began on February 28 and roughly $950 million in oil futures hours before Trump announced a ceasefire. The report says Washington insiders came under suspicion and the White House warned staff against insider trading in April. The oil-futures activity is distinct from prediction-market contracts.

Federal and local authorities diverge

The inquiry comes amid a dispute over oversight. According to BANKBIT, the federal government maintains that event contracts are financial instruments rather than traditional gambling. New York Attorney General Letitia James sought to shut down Kalshi in July over alleged state gambling-law violations; the US Commodity Futures Trading Commission intervened this week and directed that the platform remain operational in the state.

Polymarket’s spokesperson said the company was willing to engage with the council, BANKBIT reports. That response does not resolve the marketing allegations, while the reported federal intervention concerns Kalshi’s continued operation rather than the outcome of the council inquiry.

What it means for prediction markets

• Marketing is a separate pressure point: The council’s investigation focuses on promotional conduct and potential exposure of minors, alongside the broader dispute over how event contracts should be regulated.
• An inquiry is not a shutdown: The supplied reporting describes an investigation and a federal intervention keeping Kalshi operational, not a council-ordered suspension.
• Integrity claims require distinctions: Allegations, investigations and arrests are not equivalent to proven misconduct, and the cited oil-futures trades should not be treated as prediction-market volume.