New York AG Issues Warning About Prediction Markets Ahead of Super Bowl
New York Attorney General Letitia James issued a warning to sports bettors about the dangers of using prediction markets such as Kalshi and Polymarket ahead of Super Bowl 60.
New York Lawmakers Targeting Prediction Markets
Per the news release, James said prediction markets are online platforms that offer bets “masquerading” as event contracts on the outcomes of political elections, sporting events, or other future events.
Unlike licensed sportsbooks, Kalshi and Polymarket can operate in all 50 states, including California and Texas, where sports wagering is not legal.
New York lawmakers allege that prediction market platforms operate without consumer protection and without supervision of the New York Gaming Commission (NYGC).
James is also warning the industry that the “conduct, advertisement, and promotion” of unlicensed sports betting violates New York’s gambling laws and could be subject to civil and criminal liability.
“Ahead of the Super Bowl, New Yorkers need to know the significant risks with unregulated prediction markets,” said James. “It’s crystal clear: so-called prediction markets do not have the same consumer protections as regulated platforms. I urge all New Yorkers to be cautious of these platforms to protect their money.”
Prediction markets have seen a significant increase in popularity over the past few years. Just last month, PrizePicks expanded its prediction markets offering into 48 states.
James Says Prediction Markets Lack Consumer Protection
James added that prediction market platforms operate as “unregulated gambling” without the basic protections New York consumers would have with licensed entities.
In her written statement, James said prediction markets lack protocol for preventing underage gambling, procedures to identify customers battling a gambling addiction, restrictions against insider betting and deceptive advertising, and regulatory review to maintain integrity.
“Treat these prediction markets as high-risk — no guarantee of returns, and no guarantee of access to your funds,” James said, urging bettors to gamble responsibly.
A spokesperson for the Coalition for Prediction Markets said in statement Monday: “We agree that consumers should steer clear of unregulated prediction markets. Our members’ platforms are all regulated by the CFTC, similar to how the SEC regulates the stock market.
“Regulation comes with many of the guardrails the AG outlines — a ban on insider trading, self-exclusion, and responsible trading guidelines. We all want the same thing: safe, fair, and legitimate products.”
In other news, New York Senate Bill 8889 would require prediction markets to get a license from the Department of Financial Services. The proposal was referred to the Senate Banks Committee last month.
The measure defines prediction markets as “any platform, electronic or physical, that allows participants to place wagers, trades, or financial positions on the outcome of future events, including but not limited to political, economic, weather, or other contingencies, where payouts are tied to event outcomes.”
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