Another day, another hour billed for the legal departments at Polymarket and Kalshi.
On Wednesday, New York City Council Speaker Julie Menin announced an investigation into the leading prediction markets that have been growing at an astonishing rate this year, in part thanks to their bold ad campaigns. New York City’s probe is focused on the marketing itself, what she called the “false, deceptive, unconscionable, and objectionable” practices at Polymarket.
Letters sent to Kalshi and Polymarket — as well as smaller prediction markets from Coinbase and Gemini — refer to The Wall Street Journal’s exposé this summer on Polymarket’s wild social-media tactics. The paper’s reporters found that Polymarket was paying influencers to post screenshots of their heroic long-shot wins. Not only were the wagers bogus, the Journal found that if a user mirrored those bets, they would have actually lost money.
The Commodity Futures Trading Commission is already investigating the ad campaign, and now New York City is, too. In her letter, Menin said the council is looking into whether or not similar marketing tactics were employed by Kalshi and the others. “We refuse to let New Yorkers, especially our young people, become collateral damage,” she wrote on X. City Council has the authority to compel the companies to turn over internal documents; in this case, Menin has given them 14 days to provide information about how many users are in the city and details on the inner workings of their marketing. Both Kalshi and Polymarket have issued statements about looking “forward” to engaging with the City Council.
