New York Lawmakers Open 2026 Session With Proposal to Ban Prediction Market Sports Betting

As New York lawmakers convened for the 2026 legislative session on January 7, gambling policy quickly emerged as a focal point, advancing multiple bills targeting sports betting and prediction market activity.

Among them is the ORACLE Act (Assembly Bill A09251), a proposal introduced by NY State Rep. Clyde Vanel, that would prohibit prediction market platforms from offering sports betting contracts to New York residents. 

The bill would bar prediction market platforms from accepting wagers on individual athletic events, effectively removing sports contracts that have become central to platforms such as Kalshi and Polymarket.

What ORACLE Act Would Do

Assembly Bill A09251 would add a new Article 48 to New York’s General Business Law, creating a formal regulatory framework for prediction markets and sharply limiting the types of contracts available to New York residents.

The bill establishes five categories of prohibited markets:

• Athletic event markets: Speculation on the outcome of individual games or in-game events, including horse racing and proposition betting. The bill includes a carveout allowing contracts tied to tournament-wide outcomes, such as overall champions or bracket-style competitions.
• Political markets: Contracts linked to federal elections, statewide or municipal New York elections, or the official actions of government officials.
• Catastrophic event markets: Markets involving war, natural disasters, public health emergencies, terrorism, mass shootings, or similar crisis events.
• Death markets: Positions tied to the death, assassination, attempted killing of individuals or groups, or mass casualty events.
• Security markets: Contracts based on the price or performance of publicly traded securities.

Operational and Consumer Protection Requirements

Beyond market restrictions, the bill imposes detailed operational rules. 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.

A09251 also mandates a 14-day waiting period before users can raise self-imposed deposit limits, requires prominent display of New York’s HOPE NY problem gambling hotline, and bans the use of “risk-free” promotional language. Credit card funding and gift certificate sales would be prohibited.

Penalties escalate significantly for violations. Civil fines can reach $10,000 per violation, rising to $50,000 for persistent conduct. Violations involving excluded participants or prohibited market makers carry penalties equal to twice the profits earned or $50,000, whichever is greater. If a court orders a platform to cease operations and it continues anyway, daily fines can reach $1 million.

The bill is written to take effect one year after enactment, giving platforms time to adjust operations if the measure advances.

Sports Contracts Butter Prediction Markets’ Bread

Sports event contracts have become the dominant product for prediction market platforms, which operate under the oversight of the Commodity Futures Trading Commission.

The sector’s expansion has drawn increasing attention from lawmakers. 

Polymarket recently announced a partnership with the New York Rangers, bringing prediction market branding to Madison Square Garden even as legislative efforts in the state of New York move to restrict sports-related contracts.

Supporters of banning these markets argue that prediction platforms are effectively offering sports betting without state licenses. Critics counter that federal CFTC oversight should preempt state gambling laws and warn that restrictions could push users toward offshore or less-regulated alternatives.

Part of a Broader Regulatory Push

The prediction market proposal emerged alongside other gambling legislation activated in the January 7 session. 

During a conversation with Gambling Insider’s Marcus DiNitto about his bill to legalize iGaming, NY State Sen. Joe Addabbo said prediction markets are on his radar.

Addabbo successfully sponsored legislation banning illegal sweepstakes casinos, although he suggested the better path is to regulate rather than ban gray market operators. 

“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 told GI. “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.”

When it comes to prediction markets, he said, “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.

“How do you do that? You regulate it, and then you start to work with certain entities.”

What Comes Next

The ORACLE Act remains in committee for review. If enacted, the legislation would mark 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 courts strike down specific prohibitions. The attorney general would gain rulemaking authority to implement additional regulations beyond the statute’s specific provisions.

Industry stakeholders are likely to challenge the legislation, arguing that federal CFTC oversight preempts state authority over prediction markets. The collision between state restriction efforts and platforms claiming federal regulatory protection will likely require court resolution.

For New York lawmakers, the question remains whether to follow Vanel’s ban-focused approach, develop Addabbo’s regulatory framework, or allow prediction markets to operate under federal oversight while traditional sports betting remains under state licensing.