Prediction markets face legal probes in New York and Baltimore

Prediction market platforms Polymarket, Kalshi, Coinbase, and Gemini Titan are facing intense legal and regulatory scrutiny across the United States. In New York City, the City Council has launched an investigation into these companies regarding allegedly “predatory,” “false,” and “deceptive” marketing practices. Council Speaker Julie Menin expressed particular concern that these platforms may be targeting young adults and minors through social media influencers, citing reports of influencers promoting fake trades to lure users.

Simultaneously, the industry is embroiled in a jurisdictional battle between state and federal authorities. While the Commodity Futures Trading Commission (CFTC) maintains that event contracts are regulated “swaps,” several states argue they constitute unlicensed sports betting. In Baltimore, the city has filed lawsuits alleging that these platforms operate illegal sportsbooks without proper licensing. Other legal actions have been initiated in Kentucky and Tennessee, as regulators seek to determine whether these digital assets are legitimate financial instruments or unregulated gambling products.