New York AG Delivers Warning to Residents Over Predictions

Bettors in the Empire State received a stark warning ahead of Super Bowl LX.

New York Attorney General Letitia James is reminding residents of the dangers of prediction markets with a new consumer alert. She described them as exploiting a loophole to offer sports betting without the same level of accountability as sportsbooks. 

“Ahead of the Super Bowl, New Yorkers need to know the significant risks with unregulated prediction markets,” James shared in the alert. “It’s crystal clear: so-called prediction markets do not have the same consumer protections as regulated platforms. I urge all New Yorkers to be cautious of these platforms to protect their money.”

The warning serves as a reminder that the New York Gaming Commission’s fair play rules do not apply to prediction markets. That makes them similar to offshore sportsbooks, which are notorious for limiting payouts. Although the industry falls under the authority of the Commodity Futures Trading Commission (CFTC), the regulator has not established a rule or guideline framework. 

The New York sports betting market is the largest in the US and generates far more tax revenue than other states, making it a prime target for prediction platforms.

CFTC Head Fights to Keep Federal Regulation

While states are pushing their right to regulate prediction platforms, newly appointed CFTC head Michael Selig has other plans.

Selig told lawmakers he believed the court system should determine the future of market regulation, but that now appears to have been false. Instead, he is pushing to establish a legal framework for the industry and insists that the federal regulator should remain in charge. 

While the CFTC’s Chairman's change in stance was sudden, it wasn’t unexpected. The White House has deep ties to the prediction industry and is looking to keep it largely unregulated. As long as Selig remains at the CFTC, it seems unlikely the regulator will heed pleas from state lawmakers.