New York AG Warns People About Prediction Market Betting Risks

New York Attorney General Letitia James has alerted the public about online prediction markets gaining traction. She urges people to be careful as Super Bowl weekend approaches, and these platforms see more action.

New York Issues Alert on Prediction Markets Lacking Player Protections

James put out a consumer alert on Monday. She pointed out worries that prediction market operators work outside New York’s gambling rules. These platforms let users trade “event contracts” linked to outcomes like sports games, political races, or even Super Bowl ads. However, the attorney general’s office stressed that they do not have the safety measures required for licensed sportsbooks.

The alert states that the New York State Gaming Commission does not supervise prediction markets. As a result, these markets lack the safeguards meant to protect consumers. These protections include steps to stop underage betting, help for problem gamblers, limits on deceptive ads, and ways for users to ban themselves if gambling becomes a problem.

James also cautioned that running or advertising unlicensed sports betting in New York might break state law. Companies could face civil or criminal penalties. Her office argued that while prediction platforms often claim to be financial tools for outcome forecasting, many work like unregulated gambling sites.

States Push Back as Prediction Platforms Surge Ahead of Super Bowl

The alert’s timing coincides with predictions of billions of dollars moving through Super Bowl LX betting markets. Platforms like Kalshi and Polymarket have gained notice by offering bets on more than just game outcomes, including halftime show specifics and which companies will run ads.

Those who back the industry argue these platforms fall under the Commodity Futures Trading Commission’s watch, likening their oversight to that of financial markets instead of gambling operations. Kalshi released a statement saying it backs strong protections for consumers and highlighted federal rules that ban insider trading and promote responsible betting. 

However, James’ office stressed the mounting financial dangers linked to the sector. New studies from the finance world have connected prediction markets to more borrowing and higher rates of loan defaults, hinting that some users might be spending beyond their means.

The attorney general urged New Yorkers to check if any platform they use has a state license and to avoid betting money they cannot afford to lose. She also warned residents that online betting can make it hard to tell the difference between fun and real money risks.

Besides New York, other states have taken legal action against prediction market operators. Massachusetts got a temporary court order against Kalshi, while officials in Nevada, Ohio, and New Jersey have also questioned the company’s operations.

For people dealing with gambling problems, the attorney general’s office suggested resources like the New York Council on Problem Gambling and its round-the-clock helpline.As Super Bowl hypegrows, state officials want to make one thing clear: not all betting sites are safe, and people should be careful where they place their bets.