New York Legislation Targets Prediction Markets with Event Contract Restrictions
According to Cointelegraph, New York Assemblyman Clyde Vanel has reintroduced a bill to the state's lower house aiming to limit the types of event contracts that prediction markets like Kalshi and Polymarket can offer. The legislation, known as the Oversight and Regulation of Activity for Contracts Linked to Events, or ORACLE Act, was initially introduced in November and seeks to prohibit certain markets related to politics, sports, the stock market, and other areas. Prediction markets have seen a surge in popularity over the past year, offering bets on various events. Notably, sports markets have become significant revenue generators, with research from Foresight Ventures indicating that up to 90% of Kalshi's volume is tied to sports. The proposed bill would ban sports event contracts linked to specific match outcomes, such as NFL games during the season, while still permitting bets on broader outcomes like the Super Bowl winner. Additionally, the legislation aims to eliminate 'prop betting,' which involves contracts focusing on specific game details, such as the first scoring team or wagers on individual players.
Prediction market platforms have encountered regulatory challenges in several states, with authorities asserting that these platforms require gambling licenses to operate. Kalshi has notably taken legal action against multiple state gambling regulators, including the New York State Gaming Commission, arguing that its operations are governed by federal law. Vanel's bill also seeks to prohibit prediction markets related to politics, deaths, or catastrophic events. Markets that allow bets on elections or government actions, such as predicting the winning political party in U.S. midterms, would be banned, as would markets concerning war, emergencies, disasters, mass shootings, terrorism, or public health crises. Furthermore, the bill targets 'death markets,' which permit wagers on the death or killing of individuals, along with markets that speculate on the price of publicly traded companies. Platforms would be required to offer users options to self-exclude and limit their time and financial expenditure on the platform. Any market continuing operations in New York after being ordered to cease would face fines of $1 million per day until compliance is achieved.
