NYC Council opens an investigation into prediction market marketing

On Wednesday, August 12, the New York City Council opened an investigation into how prediction market platforms advertise. Letters went to four companies: Polymarket, Kalshi, Coinbase Global, and Gemini Space Station, which operates the Titan platform. Each was asked for records going back to January 1, 2025, and given 14 days to respond.

This is an inquiry into marketing. It is not a ruling on whether prediction markets are legal in New York. That distinction matters, because there are three separate fights over prediction markets running in the United States right now and they get blurred together constantly.

Details below come from reporting by Fortune and Gizmodo. We could not load the Council's own release while writing this, so we have not linked it. If you find a discrepancy between what we wrote and the Council's release, the release is right and we are not.

What the Council actually asked for

The letters request information on the number of New York City users each platform has, customer ages and demographics, user financial gains and losses, advertising methods, payments to influencers, and how effective that marketing was.

Two committees are behind the inquiry: Consumer and Worker Protection, chaired by Harvey Epstein, and Oversight and Investigations, chaired by Shekar Krishnan. Council Speaker Julie Menin sent the letters. A hearing is planned, with no date announced yet.

Polymarket drew the most specific allegations, all of them about influencer marketing: undisclosed paid partnerships, videos depicting trades that did not happen, and false depictions of profits. Polymarket said in response, "We look forward to engaging with The New York City Council on this matter." The other three companies did not comment immediately.

What it does not mean

A City Council cannot shut down a federally designated contract market. The CFTC designates and supervises exchanges like Kalshi, and that authority does not pass through a municipal legislature.

The Council was also explicit that it is not investigating whether these contracts violate New York State law on gaming. That question is being fought separately in the courts, and we wrote up the state of it in is Kalshi legit.

What a City Council does have is oversight power, a hearing calendar, the ability to draft city consumer protection law, and the ability to refer findings to enforcement agencies. So the realistic near-term outcomes are a public hearing, possibly a local advertising rule, and pressure on how these platforms buy attention. None of that decides whether the contracts themselves are lawful.

Three tracks, one topic

| Track | Who decides | What it controls | Where it stands | | --- | --- | --- | --- | | Federal rulemaking | CFTC | Which event contracts may be listed at all | Comments on the public interest proposal closed July 27, 2026 | | State law and litigation | State regulators and federal courts | Whether state law can reach contracts on a federal exchange | In litigation, unresolved | | City consumer protection | New York City Council | How these platforms may advertise, and to whom | Letters sent August 12, 2026, hearing planned |

The federal track is the one with the widest reach. The CFTC's proposed rule, Prediction Markets; Public Interest Determinations, published June 12, 2026 under docket CFTC-2026-1189, would define what it means for a contract to "involve" an activity, define "gaming," and set out the factors the Commission weighs when it reviews a contract. It also lists the categories that trigger review: activity unlawful under federal or state law, terrorism, assassination, war, and gaming. Comments closed on July 27.

Read those three rows together and the shape of the year becomes clearer. Federal regulators are deciding what can be listed. Courts are deciding who has authority. Cities are looking at how the products are sold. A platform can win on all three, lose on all three, or split them.

Why the marketing question is the one to watch

The legality fights are about jurisdiction, and jurisdiction fights are slow. The marketing question is faster, because advertising rules can change without settling any constitutional argument, and because the specific complaints being raised are things a platform controls directly: who its influencers are, what they claim, and who sees the ads.

It also lands on the part of the industry that is hardest to defend. A contract on a regulated exchange is a defensible financial product. A video showing a trade that never happened is not.

Where Ravioli sits in this

Ravioli is free to play. You trade with Sense, our free in-app currency, so there are no deposits, no identity verification and no fees, and none of the state legality questions above apply to a free market. There are real prizes for people who call it right.

That does not put us outside the marketing question, and we would rather say so plainly than pretend the story is only about other people. Everything in the Council's list, undisclosed influencer partnerships, invented results, marketing pointed at young people, is a thing any platform in this category can do, free or paid. Our answer to it is the rule we publish under: every number we print has to come from something we read that day, and when a price has nobody trading behind it we say so instead of calling it a crowd view.

Here is that rule doing its job. Ravioli has one market on the board that touches this story directly, and it asks whether the U.S. Senate Committee on Indian Affairs will propose new regulations for prediction markets by December 31, 2026. Yes opened at 45 cents. That market has no trading in it at all, so 45 cents is the opening line it was seeded with, not a view held by anyone. We are showing it because it is on topic, not because it is evidence of anything.

What to watch next

Three things, in order of how much they would tell you. First, whether the Council schedules its hearing and whether the four companies appear. Second, whether any city-level advertising rule is actually drafted, since a hearing without a bill is a news cycle rather than a change. Third, what the CFTC does now that its comment period has closed, because that is the track that decides which contracts exist in the first place.

If you want the background on how these contracts are supervised and where the state fights came from, start with is Kalshi legit and how market odds and resolution work.

Ravioli is a free-to-play prediction market. You trade with Sense, our free in-app currency, prizes are real, and we publish our misses next to our hits.

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