New York’s New Bill Targets Prediction Markets with Strict Restrictions

New York’s Assembly Bill 9251, referred to as the Oversight and Regulation of Activity for Contracts Linked to Events (ORACLE) Act, aims to establish definitions, regulations, and limitations for the operation of prediction markets.

AB 9251 Aims to Heavily Restrict Prediction Markets

The bill’s key provision explicitly prohibits certain types of markets for users in New York, including those centered on catastrophic events, politics, deaths, securities, and athletic events. Under the ORACLE Act, prediction market platforms are required to prevent New York users from taking speculative positions in these markets.

The bill would prohibit prediction market providers from collaborating with liquidity providers or other entities that knowingly engage in gaming as part of their routine business. It seems that the provision is designed to prevent overlap between gambling operators and prediction market companies.

Violations could lead to significant financial penalties. Single infractions may result in civil fines of up to $10,000, while repeated misconduct could incur fines of up to $50,000 per violation. The attorney general would have the authority to pursue injunctions to close non-compliant platforms, with ongoing violations potentially subject to fines of up to $1 million per day.

Assembly Bill 9251 poses yet another potential barrier in the path of prediction markets operators who want to expand further into the state. Kalshi, for example, has been at the forefront of this struggle between regulators and companies. Last month, it filed a federal lawsuit against the New York Gambling Commission, aiming to curtail the regulator’s authority and prevent it from classifying Kalshi as a sports betting platform.

What Else Would the New Bill Change?

Assembly Bill 9251 also wants to enforce strict consumer protection measures on authorized platforms, including a minimum age requirement of 21, self-exclusion options, and mandatory display of the HOPE NY gambling hotline. Providers would be required to disclose all sources used to determine contract outcomes and to refrain from relying on proprietary or confidential data for settlements.

Advertising restrictions are another key component, prohibiting marketing aimed at individuals under 21 and banning terms such as “risk-free” in promotions. Platforms would also be barred from using push notifications to advertise bonuses or markets in which a user has no open positions. Finally, all advertisements must prominently include responsible gambling warnings throughout.

The bill is currently under review by the General Assembly’s Standing Committee on Consumer Affairs and Protection, and if it passes, the attorney general would be responsible for enforcing the law in a way that safeguards consumers while supporting innovation in speculative digital markets.