A new legislative proposal before the New York State Assembly would prohibit a broad range of prediction markets in the state, including many of those tied to sports outcomes, political events, or catastrophic incidents.
Assembly Bill 9251, also known as the Oversight and Regulation of Activity for Contracts Linked to Events (ORACLE) Act, seeks to define, regulate and restrict the operation of speculative markets linked to future events.
The bill’s most consequential section explicitly bans several categories of markets for New York users, including prediction markets based on “catastrophic events, politics, deaths, securities, and athletic events.”
The ORACLE Act specifies that prediction market platforms “shall not permit New York users to open a speculative position” on these markets.
“Athletic events”, however, specifically refers to single sporting events (or occurrences within those events), while prediction markets relating to the overall winner of a sports tournament, for example, would still be permitted under the bill.
The bill would also impose stringent consumer protection rules on any permitted platforms, including an age restriction of 21 years or older, self-exclusion mechanisms, and mandatory display of the HOPE NY gambling hotline.
Providers would be required to disclose all settlement sources for determining outcomes and to avoid using proprietary or confidential data for settling contracts.
Advertising restrictions form another central feature of the proposed law, which would prohibit marketing directed at individuals under 21 and ban phrases like “risk-free” from promotions.
Platforms would also not be permitted to use push notifications to promote bonuses or markets in which the user has no open positions. All advertisements would have to display responsible gambling warnings throughout their duration.
Further, the legislation forbids credit card deposits and gift certificate sales linked to prediction markets.
Sportsbooks appear to be targeted in bill
Under the bill, prediction market providers would be barred from partnering with any liquidity providers or entities that knowingly engage in gaming activities as part of their regular business.
This clause may be intended to prevent crossover between gambling operators and prediction market firms. DraftKings, FanDuel and others are already preparing to launch their own prediction markets.
Violations could result in substantial financial penalties. Individual infractions may incur civil fines of up to $10,000, with persistent misconduct punished by penalties reaching $50,000 per violation.
The attorney general would be empowered to seek injunctions to shut down non-compliant platforms, with continuing violations carrying fines of up to $1m per day.
The ORACLE Act seeks to delineate prediction markets from regulated gambling and securities activities, though critics may view its scope as overly broad.
If passed, the attorney general would be tasked with implementing enforcement measures that balance consumer protection with technological innovation in speculative digital markets.
The bill currently sits with the General Assembly’s Standing Committee on Consumer Affairs and Protection.