New York AG warns about prediction market risks ahead of Super Bowl
New York Attorney General Letitia James speaks to the media after attending a hearing and pleading guilty to charges that she defrauded a mortgage lender before the U.S. District Court for the Eastern District of Virginia in Norfolk, Virginia, U.S., October 24, 2025.
Jonathan Ernst | Reuters
With Super Bowl 60 just days away, New York Attorney General Letitia James has a message for consumers: Be careful when trading the prediction markets.
“New Yorkers need to know the significant risks in unregulated prediction markets,” James said in a statement Monday.. “This much is clear: so-called prediction markets do not have the same consumer protections as regulated platforms. I urge all New Yorkers to be wary of these platforms to protect their money.”
Forecasting platforms such as Kalshi and Polymarket billions of dollars Trading volume around the Super Bowl
Consumers can trade in gaming events similar to online sports betting sites. DraftKings or FanDuel — as well as predetermined outcomes like which companies will advertise during the Super Bowl, a topic CNBC Sport reported last week.
James said the platforms’ products are bets “masked” as event contracts.
Kalshi refused to comment. Polymarket representatives did not immediately respond to a request for comment.
James warned that concerns about the nascent prediction market industry include “supporting bans against insider betting and requiring regulatory scrutiny to ensure the financial stability and integrity of gambling operators.”
“Prediction markets may appear as modern, high-tech platforms for speculation or ‘guessing,’ but in practice most operate as unregulated gambling, without the basic protections that New York consumers both deserve and expect from properly licensed operators,” James said in the statement. he said.
Prediction market contracts trade similarly to all-or-nothing options, with contracts priced between $0 and $1. Contracts move up or down depending on the action.
In addition to contracts for Super Bowl commercials, both Polymarket and Kalshi are asking “What songs will be played at the halftime show?”, “Who will be attending the big game?”, as CNBC reported last week. It also offers other game-related trades, including topics like “Seattle vs. New England: Most Rushing Yards” and more traditional sports betting “bets” like “Seattle vs. New England: Most Rushing Yards.”
As in traditional financial markets, there are laws prohibiting insider trading in prediction markets. But industry experts say they are skeptical that the Commodity Futures Trading Commission, which was recently gutted as part of widespread government cuts, has the will or the means to police these issues.
Last week, CFTC Chairman Michael Selig said he had directed agency staff to withdraw a proposed rule that would ban prediction trading on sports and politics. He said new rules will come.
Disclosure: CNBC has a business relationship with Kalshi.
