New York State proposes new prediction market regulation bill: bans political and sports contracts, seeking a balance between innovation and risk

New York State Legislature reintroduced the “ORACLE Act” in November 2025, proposing systematic regulation of prediction markets. The bill suggests banning contract trading related to political and sporting events, while establishing a series of regulatory measures such as age restrictions, market access conditions, advertising limitations, and anti-manipulation provisions. Notably, the regulators are not outright banning all sports-related trading but are seeking a balance between risk prevention and market innovation.

Analysis of the Core Provisions of the Bill

Scope of the Ban and Flexibility

According to the bill, New York State plans to prohibit the following types of contract trading:

• Contracts related to political elections
• Bets on specific sports event outcomes (such as exact scores, performance of particular teams)
• Transactions related to death events
• Transactions related to catastrophic events

However, the bill also demonstrates regulatory flexibility. While the ban covers specific event types, neutral outcome categories like “league win/loss” may still be tradable, meaning broad sports-related outcome predictions are not necessarily within the scope of the ban. This differentiated approach indicates that regulators aim to prevent risks while also considering the normal operation of the market.

Supporting Regulatory Measures

In addition to the ban, the bill establishes several regulatory provisions:

Background of Accelerated Regulation

The reintroduction of this bill is not accidental. Recent events, such as the insider trading incident in Venezuela, have accelerated regulatory efforts. This incident involved unregulated offshore prediction platforms, raising widespread concerns about the risks in prediction markets.

Meanwhile, Democratic Assembly Member Ritchie Torres of New York State is also pushing the “2026 Public Integrity Act for Financial Prediction Markets,” which would prohibit federal elected officials, political appointees, and administrative employees from trading on prediction markets when possessing non-public information. This indicates that regulators are not only concerned with market risks but also with insider trading issues.

Industry Attitudes

Tarek Mansour, CEO of prediction market platform Kalshi, expressed support for anti-insider trading legislation, noting that such incidents mainly involve unregulated offshore platforms. This stance suggests that legitimate operators (regulated platforms) actually welcome stricter regulatory frameworks, as it helps differentiate them from non-compliant competitors.

Impact Assessment on Prediction Markets

In terms of regulatory strictness, the “ORACLE Act” is relatively moderate. It does not completely ban prediction markets but manages risks by restricting certain event types and setting operational standards. This means:

• Compliant prediction market platforms still have room to operate
• Markets related to politics and sports betting will face significant restrictions
• Platforms will need to allocate more resources to risk management and compliance
• User experience may be affected by various limitations

Summary

This bill from New York State reflects a shift in the US regulators’ attitude toward prediction markets. From outright permissiveness to orderly regulation, the process balances market innovation protection with systemic risk prevention. The key question is whether the bill will pass through the state legislature and whether other states will follow with similar regulatory frameworks. For prediction market platforms, compliance has become a necessity rather than an option.