Revived NY Bill Targets Sports, Politics, and Death Prediction Markets

New York Assemblyman Clyde Vanel reintroduced the ORACLE Act, which aims to restrict prediction markets in the state. The legislation would ban betting on individual athletic events and player performances, although it allows bets on tournament outcomes. The bill also prohibits prediction markets on political events, mass shootings, and death forecasts.

The bill's timing coincided with Polymarket's new partnership with the New York Rangers, where the platform will display odds at Madison Square Garden. This partnership highlights the growing influence of prediction markets in sports, with sports-related bets accounting for a large portion of trading volume.

Under the ORACLE Act, prediction markets would need to implement self-exclusion features and enforce age restrictions. Violations could result in civil penalties as high as $1 million per day for operating without a court order.

Why Did This Happen?

The legislation responds to growing concerns about the lack of consumer protections and potential for insider trading in prediction markets. For example, a user won $436,000 on a Polymarket bet predicting the ouster of Venezuelan President Nicolás Maduro. This has raised questions about the integrity of such markets and whether they enable illicit activities.

Lawmakers argue that prediction markets are often unregulated and lack transparency, making them susceptible to abuse. A regulatory attorney noted that such markets are almost entirely unregulated and lack the oversight needed to protect users.

What Are Analysts Watching?

Prediction markets are also facing legal challenges from Native American groups, who argue that these platforms violate gaming laws. A coalition including the Indian Gaming Association and the National Congress of American Indians filed a brief supporting a case against Kalshi and Robinhood. These groups claim that prediction markets threaten traditional tribal gaming revenue.

Kalshi and Robinhood have responded by asserting that their operations are regulated under the Commodity Futures Trading Commission (CFTC), arguing that this oversight supersedes state or tribal authority. However, this claim is being contested in courts.

Prediction markets are also drawing attention due to their potential for influencing public opinion and political outcomes. A separate trader reportedly placed a bet on the U.S. striking Iran by the end of January, further fueling scrutiny around insider trading.

How Might This Affect Markets?

The ORACLE Act, if passed, could significantly impact the business models of prediction market operators like Polymarket and Kalshi. These platforms rely heavily on sports-related bets, which make up a large portion of their notional trading volume. For Kalshi, sports betting accounted for 93% of notional trading volume in 2025, while Polymarket reported 37%.

Regulation could also lead to increased compliance costs and limit user access in New York, potentially reducing the appeal of these platforms. However, it could also encourage greater transparency and consumer trust if implemented effectively.

The legal and regulatory landscape for prediction markets remains uncertain. While some lawmakers push for stricter rules, others argue that these markets offer valuable insights and should be allowed to operate freely.

Prediction markets have become increasingly popular in financial and political forecasting, but their regulatory status is still evolving. The outcome of current legal challenges and proposed legislation will likely shape the future of the industry.