Did Wisconsin Democrats Just Halt a Left-Wing Surge?

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Luke Vargas (0:18)

New York City dials up the pressure on prediction markets. Plus, we'll look at whether last night's Democratic primary suggests a left-wing surge is stalling and Paramount floats leaving California as its antitrust battle with the state drags on.

Joe Flint (0:34)

Could one of Hollywood's oldest studios be relocating from Tinseltown to Music City? It's a distinct possibility.

Luke Vargas (0:41)

It's Wednesday, August 12th. I'm Luke Vargas for The Wall Street Journal and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

New York City is launching a sweeping investigation into four prediction markets with the City's Council probing Polymarket, Kalshi, Coinbase and Gemini Titan for alleged deceptive marketing practices and the targeting of miners. Reporter Caitlin McCabe has the latest.

Caitlin McCabe (1:13)

So City Council Speaker Julie Menon has sent letters to these prediction markets and in a letter addressed to Polymarket she asked for details about promotional videos that appeared to depict fake trades and promoted insider trading on social media, some of which may have targeted miners. This comes after our colleagues published a story earlier this summer analyzing more than a thousand videos from Polymarket creators, which found that about 70% of them featured these dummy sites that the company used to film fake traits.

Luke Vargas (1:50)

And while Caitlin said that the Council has no power to bring criminal charges, its actions could still force company practices into the light.

Caitlin McCabe (1:58)

So what City Council can do is issue subpoenas forcing companies to turn over documents, which, you know, it's worth noting has rarely, if ever, been used on a private firm. But what City Council can also do is hold public hearings on the issue, which it says it intends to do. And Menon says she's also considering legislation around this that would authorize increased enforcement, public education campaigns, things like that.

Luke Vargas (2:27)

Kalshi and Gemini Titan didn't respond to requests for comment. Coinbase spokeswoman said that the company fully complies with applicable laws. And a spokeswoman for Polymarket said the company looks forward to engaging with the City Council. We should note that Polymarket has a data partnership with Dow Jones, the publisher of the journal.

Turning to yesterday's primaries, Milwaukee County Executive David Crowley has narrowly defeated Democratic Socialist Francesca Hong to win Wisconsin's Democratic nomination for governor. Hong had been leading in the polls, and her loss to Crowley, who scored a late endorsement from Governor Tony Evers, suggests that an intra-party fight over how Democrats position themselves ahead of November's general election is far from over. With more, I'm joined by The Journal's Washington Coverage Chief, Damian Paletta.

Damian, good morning. Would it be premature after these results to say that the left-wing surge that we had been seeing in Democratic primaries of late may be ebbing now?

Damian Paletta (3:26)

Not at all. This centrist strike back in Wisconsin. I mean, if you just remember last week in Michigan, the real progressive candidate, Abdul El-Sayed, was predicted to win the US Senate primary for Democrats by double digits. Instead, he won by just one point. And here we have a similar result in Wisconsin where Francesca Hong, a member of the Democratic Socialists of America, was predicted to win by polls by more than 10 points. And there, on election day, the only poll that really matters, she ends up losing. David Crowley closes the gap and makes up all that distance and ends up edging her out.

Luke Vargas (4:03)

Damian, we'd reported just a few days ago that the GOP may be losing its edge with voters on the economy, polling revealing some skepticism over whether they can address cost of living concerns. And into that void, Hong, who is a part-time bartender, had presented herself as knowing what people are going through, saying she had the bold solutions to lower costs. I guess New York City voters, maybe who got behind Zoran Mamdani, might validate that premise. But has Wisconsin shown us there's a split here about the electoral wisdom of going so bold?

Damian Paletta (4:32)

Exactly. And I think she has a lot of, quite frankly, really bold ideas that I think made people very nervous in Wisconsin. So, yeah, Mamdani might work in New York, his politics might work in New York, AOC's politics might work in New York, Bernie Sanders' politics might work in Vermont. But we're not really seeing that work in states like Wisconsin. It did narrowly work in Michigan. Now, El-Sayed's really got a big uphill battle to win the November general election against Mike Rogers. But we saw in Wisconsin and the governor's race, voters said, no, thank you, because that kind of progressive Democratic socialist candidate was just not what they were looking for.