New York Introduces Strict Regulations on Prediction Markets with Assembly Bill 9251
Introduction to the ORACLE Act
New York’s Assembly Bill 9251, also known as the Oversight and Regulation of Activity for Contracts Linked to Events (ORACLE) Act, seeks to establish clear definitions and impose regulations on the operation of prediction markets within the state.
Key Restrictions Targeting Prediction Markets
This legislation aims to severely restrict certain types of prediction markets, particularly those related to catastrophic events, political outcomes, deaths, securities, and sports events. Platforms offering these markets will be obligated to prevent residents of New York from participating in such speculative activities.
Additionally, providers of these markets will be prohibited from associating with liquidity providers or other businesses that routinely engage in gaming. This measure appears to be designed to separate gambling entities from prediction market operations.
Non-compliance with the bill could result in heavy penalties. Initial violations may incur civil fines up to $10,000, with repeated infractions attracting fines up to $50,000 per incident. The attorney general is given powers to seek injunctions against platforms that do not comply, and ongoing breaches could lead to fines as high as $1 million per day.
This new bill represents another regulatory challenge for prediction market operators wishing to expand in New York. For instance, Kalshi, a company prominent in this field, has recently initiated a federal lawsuit challenging the New York Gambling Commission’s authority, disputing its classification as a sports betting entity.
Additional Consumer Protection Measures
Assembly Bill 9251 also mandates various consumer protection safeguards on authorized platforms. These include a minimum user age of 21, options for self-exclusion, and compulsory display of the HOPE NY gambling hotline.
Providers would be required to fully disclose all data sources used to determine outcomes of contracts and avoid using confidential or proprietary information in settlement decisions.
Restrictions on Advertising Practices
Advertising under the new law would be tightly controlled, forbidding marketing targeting individuals under 21 and banning promotional language such as “risk-free.” Platforms would also be restricted from sending push notifications advertising bonuses or markets where users do not have open positions.
All promotions must include clear responsible gambling messages to ensure consumer awareness.
Current Status and Enforcement
The bill is now being reviewed by New York’s General Assembly Standing Committee on Consumer Affairs and Protection. If enacted, enforcement responsibilities will fall to the attorney general, who will balance consumer safety with fostering innovation in speculative digital markets.
