Aug 12 (Reuters) \u2013 New York City Council Speaker Julie Menin has accused major prediction market startups of using predatory marketing practices to exploit young traders, according to a letter \u200bsent to Polymarket that shows the council has opened \u200can investigation into the allegations.<\/p>\n
The letter from Menin to Polymarket CEO Shayne Coplan, dated August 11, also named other prediction market platforms, including Kalshi, Coinbase and Gemini Titan, in connection with alleged marketing practices targeting young users.<\/p>\n
Prediction market startups \u200csuch \u200bas Polymarket allow people to wager on \u2060event contracts across topics \u2060including politics, sports and entertainment. The sector has expanded rapidly in recent years, attracting a large base of traders.<\/p>\n
Critics say the platforms are little more than gambling and could pose risks \u200btied to insider trading and habit-forming behavior.<\/p>\n
The letter, citing news reports, said Polymarket allegedly conspired with marketing agents and social media \u2060influencers to target young adults and potentially \u2060minors with false and deceptive advertising.<\/p>\n
New York Attorney \u200bGeneral Letitia James sued prediction market Kalshi last month asserts that the \u200bplatform violates New York State gambling laws.<\/p>\n
The investigation by \u200cthe New York City Council could become a defining test for Polymarket and other prediction market platforms as they defend their business model against state regulators challenging event contracts, including sports-related markets.<\/p>\n
Polymarket is regulated \u2060by the U.S. Commodity Futures Trading Commission. Earlier this year, the CFTC sued New York, accusing the state of encroaching on federal authority \u2060by pursuing prediction-market companies \u200cunder gambling laws.<\/p>\n
According to the letter, Polymarket allegedly \u2060paid influencers without disclosure, produced videos showing fake \u200btrades \u200con sites built to mimic its platform, presented \u200blosing bets \u2060as winners and encouraged insider trading.<\/p>\n
The letter also asked Polymarket to answer questions about its use of social media, influencers and content creators in its marketing campaigns.<\/p>\n
The Council has requested that Polymarket respond to all queries within 14 business days.<\/p>\n
(Reporting by Pritam Biswas in Bengaluru; Editing \u200bby Tasim Zahid)<\/p>\n","protected":false},"excerpt":{"rendered":"Aug 12 (Reuters) \u2013 New York City Council Speaker Julie Menin has accused major prediction market startups of…\n","protected":false},"author":2,"featured_media":319400,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[9,11,10],"class_list":["post-319399","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-new-york","tag-new-york-headlines","tag-new-york-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/319399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=319399"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/319399\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/319400"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=319399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=319399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=319399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}