A proposed New York law could force platforms like Kalshi and Polymarket to rethink how they operate in the state.
Crackdown on Sports Contracts in the Cards
New York lawmakers are considering a bill that would put strict limits on prediction market platforms, particularly those offering sports-related contracts. The ORACLE Act (Assembly Bill A09251), introduced by Assemblymember Clyde Vanel, seeks to ban prediction markets from accepting wagers on individual athletic events—a move that would hit platforms like Kalshi and Polymarket where it hurts.
While these platforms operate under the eye of the federal Commodity Futures Trading Commission (CFTC), the state isn’t keen on what looks a lot like unlicensed sports betting.
What the ORACLE Act Actually Does
The bill would insert a new Article 48 into New York’s General Business Law, establishing rules for prediction markets while carving out a wide array of forbidden contract types. In short: you can speculate on some things, but not others.
Here’s what New Yorkers wouldn’t be allowed to bet on:
- Individual sports events – Think game outcomes, in-play props, or horse races. Bracket winners or tournament champs might still be fair game.
- Political outcomes – No wagers on elections or political actions in New York or federally.
- Crisis events – This includes war, natural disasters, mass shootings, and public health emergencies.
- Death markets – Contracts tied to assassinations, celebrity deaths, or mass casualties would be off-limits.
- Public securities – You won’t be betting on Tesla’s next earnings report.
Rules, Restrictions, and Painful Penalties
The bill doesn’t stop at market types. It introduces a regulatory framework with a strong focus on consumer protection and responsible gambling.
- Users must be 21 or older.
- Minors must be blocked immediately if detected.
- No participation allowed for employees, insiders, data providers, or self-excluded individuals.
- A 14-day wait period before raising personal deposit limits.
- Platforms can’t market using “risk-free” bets or allow credit card funding.
- Gift certificates are also off the table.
Violations come with teeth: Civil fines start at $10,000 per breach and can go up to $50,000 for repeat offenses. Operating after being ordered to shut down? That’ll cost up to $1 million per day.
If passed, the law would kick in a year later, giving platforms time to either adapt—or exit the state entirely.
Sports Contracts Drive the Market—For Now
Prediction markets have increasingly leaned on sports contracts to drive volume. These contracts are often presented as financial products, which is why platforms argue they fall under CFTC jurisdiction, not state gambling rules.
That hasn’t stopped states from pushing back. Just weeks before the ORACLE Act was introduced, Polymarket announced a splashy branding deal with the New York Rangers—bringing prediction markets to Madison Square Garden. The timing couldn’t be more awkward.
Supporters of the bill say it closes a loophole that allows sports betting under the guise of futures contracts. Critics argue the state is overreaching into a federally regulated space and that users could simply pivot to less-regulated, offshore options.
Bigger Picture: The States Are Moving In
New York isn’t alone. The ORACLE Act is part of a broader shift among states looking to either rein in or formally regulate prediction markets.
Sen. Joe Addabbo, a major player in New York’s gaming policy, recently spoke to Gambling Insider about his interest in iGaming and prediction markets. He’s not against the concept, but favors a “regulate, don’t ban” approach.
“We can’t just sit on the sidelines and wait for the federal government,” Addabbo said. “We have to do it within our jurisdiction.”
Rather than locking the doors, Addabbo wants to see cooperation between the state and platforms like Kalshi—assuming there’s willingness to play by New York’s rules.
What Happens Next?
The ORACLE Act is still sitting in committee. If it passes, it would mark one of the toughest state-level restrictions on prediction markets to date. And with federal preemption claims likely to surface, a legal fight seems almost inevitable.
Whether New York opts for Vanel’s hardline restrictions or Addabbo’s regulatory handshake, one thing’s clear: the prediction market free-for-all is ending. Platforms that want to stay in the game will need to start playing by the states’ rules—or risk getting benched.
