- New York State Gaming Commission Chair Brian O’Dwyer calls out prediction markets, saying they are a “direct threat to the commission’s authority.”
- FanDuel and DraftKings have announced their intent to offer sports contracts in December.
NEW YORK – Prediction markets are once again under the microscope in the Empire State as the New York State Gaming Commission discussed the future of allowing such markets under their jurisdiction.
In a meeting on Tuesday, the board met to address the topic, with Chair Brian O’Dwyer calling prediction markets a “direct threat to the commission’s authority,” making a harsh indictment on markets such as Kalshi, Polymarket, and Crypto.com.
This is not the first time that the NYSGC has engaged in combatting prediction markets, issuing a cease-and-desist letter to Kalshi in October, which resulted in an ongoing lawsuit against the state.
Why Does New York Want To Get Rid Of Prediction Markets?
Many states have taken action against prediction markets and there are a few reasons behind this, including:
- Offering sports markets without a sports betting license
- Less restrictions on underage gambling
- Less safeguards for problem gambling
- Different tax rules
Simply put, prediction markets offering sporting events presented as “contracts” allows for a loophole around state regulations that apply to legal sports betting sites in New York, which are valuable commodities for the state to collect tax dollars.
Along with different age restrictions and overall protections for bettors, these markets defy the boundaries that have been set by states for years.
What Are The Chances Of Prediction Markets Getting Banned In New York?
As of right now, there are no states that have banned prediction markets due to the legislative gray area in which they reside.
Many states with sports betting have implemented injunctions on these markets, but such injunctions will likely be temporary before the states come to a final verdict as to whether or not they will allow these prediction markets to continue offering sports contracts.
Another aspect in play is the fact that legal sports betting sites such as FanDuel and DraftKings have already announced their intentions to begin offering their own sports contracts, while daily fantasy sports platforms Underdog and PrizePicks have partnered with existing prediction markets.
If the state were to take further action against prediction markets and sportsbooks that currently plan to offer contracts for sporting events, state legislators would have to revoke each of their licenses and likely undertake a lengthy court battle.
If such markets are ever to be eliminated or even strictly regulated, it will likely be a long time down the road.
