New York, Jan 10: New York lawmakers opened the 2026 legislative session on Tuesday with a proposal that would bar prediction market platforms from offering sports-related contracts to state residents, adding to growing scrutiny of an industry that has rapidly expanded into sports outcomes.
The proposal, known as the ORACLE Act, or Assembly Bill A09251, was introduced by Democratic Assembly member Clyde Vanel. It would prohibit prediction market platforms from accepting wagers on individual athletic events in New York, effectively removing sports contracts that have become a central product for operators such as Kalshi and Polymarket.
The bill would add a new Article 48 to New York’s General Business Law, establishing a formal regulatory framework for prediction markets while sharply limiting the types of contracts available to users in the state.
Under the proposal, five categories of markets would be prohibited, including contracts tied to individual athletic events, political elections or official government actions, catastrophic events such as war or natural disasters, death or mass-casualty events, and the price or performance of publicly traded securities. The bill includes a carveout allowing sports-related contracts linked to tournament-wide outcomes, such as overall champions or bracket-style competitions.
Beyond market restrictions, the ORACLE Act sets out detailed operational and consumer protection requirements. Platforms would be required to limit access to users aged 21 and over, immediately suspend accounts belonging to minors, and bar participation by employees, settlement data providers, individuals with insider information, and anyone who has self-excluded.
The legislation would also mandate a 14-day waiting period before users can raise self-imposed deposit limits, require prominent display of New York’s HOPE NY problem gambling hotline, ban the use of “risk-free” promotional language, and prohibit credit card funding and gift certificate sales.
Penalties would escalate sharply for violations. Civil fines could reach $10,000 per violation, rising to $50,000 for persistent conduct. Violations involving excluded participants or prohibited market makers would carry penalties equal to twice the profits earned or $50,000, whichever is greater. Platforms that continue operating after a court-ordered shutdown could face daily fines of up to $1 million. The bill is written to take effect one year after enactment.
Sports event contracts have become the dominant product for prediction market platforms, which operate under the oversight of the U.S. Commodity Futures Trading Commission. The sector’s growth has drawn increasing attention from lawmakers, even as companies pursue high-profile partnerships. Polymarket recently announced a deal with the New York Rangers, bringing prediction market branding to Madison Square Garden.
Supporters of the proposed ban argue that prediction market platforms are effectively offering sports betting without state licenses. Critics counter that federal CFTC oversight should preempt state gambling laws and warn that tighter state restrictions could push users toward offshore or less-regulated alternatives.
The proposal emerged alongside other gambling-related bills introduced at the start of the session. State Senator Joe Addabbo, who has sponsored legislation to ban illegal sweepstakes casinos, said prediction markets are also on his radar.
“My bill to ban these illegal sweepstakes casinos in the state was, in my opinion, easier to do, but the necessary harder work to do is to regulate,” Addabbo said in an interview. “And we can’t just sit on the sidelines and wait for the federal government to regulate. We have to do it within our jurisdiction.”
He added that a regulatory approach could involve cooperation with existing platforms. “We can work with Kalshi, but let’s regulate Kalshi. Let’s work with them, but let them work with us as well. It’s a two-way street,” Addabbo said. “How do you do that? You regulate it, and then you start to work with certain entities.”
The ORACLE Act remains in committee. If enacted, it would represent one of the most significant state-level restrictions on prediction markets since the sector began expanding into sports contracts. The bill includes severability provisions intended to preserve remaining sections if specific prohibitions are struck down, and would grant New York’s attorney general rulemaking authority to implement additional regulations.
Industry stakeholders are expected to challenge the measure, arguing that federal oversight preempts state authority. For New York lawmakers, the debate now centres on whether to pursue Vanel’s ban-focused approach, develop a broader regulatory framework, or allow prediction markets to continue operating under federal supervision while traditional sports betting remains subject to state licensing.
