The New York City Council announced it's investigating prediction market platforms for their marketing strategies. Speaker Julie Menin sent letters to four companies. The council is considering legislation.
Prediction markets let you bet on election outcomes and economic events. They've been mostly illegal in the United States for decades. A few platforms recently squeezed through regulatory loopholes. Now a city council wants to regulate how they advertise products that most New Yorkers can't legally access in the first place.
This is like forming a task force to investigate how heroin dealers brand their packaging. The marketing isn't the problem, Julie.
The platforms targeted operate in a legal gray zone so murky that calling it gray is generous. It's more like charcoal mixed with squid ink during a power outage. But sure, let's focus on whether their Instagram ads are too persuasive.
Menin's concern appears to be that these companies might trick regular people into gambling on political outcomes. Regular people who already lose money on scratch-offs, DraftKings parlays, and leveraged ETFs they don't understand. Adding presidential election futures to that list barely moves the needle on American financial illiteracy.
The legislation under consideration will probably restrict marketing while doing nothing about the actual platforms. Classic regulatory theater. Ban the billboard, ignore the casino.
Four companies received letters. None were named in the announcement, which is perfect. Investigate them in secret. Really inspires confidence in the process.
Retail traders who somehow gained access to these platforms are now sweating whether they can still bet on Jerome Powell's next rate decision. They can't read a balance sheet but they've got strong opinions on Taiwan semiconductor production forecasts. The City Council is deeply worried about protecting these people from effective banner ads.
Photo by on Unsplash
Leave a Comment