New York State Attorney General Letitia James issued a warning to sports fans about the dangers of prediction markets ahead of Super Bowl weekend.
“This industry doesn't have the same consumer protections as regulated platforms,” James wrote Monday in a post shared on her X account.
Ahead of the Super Bowl, I'm warning New Yorkers about the risks of the prediction market industry.
— NY AG James (@NewYorkStateAG) February 2, 2026
This industry doesn't have the same consumer protections as regulated platforms.
Key Takeaways
- James says prediction platforms do not have a variety of consumer protection standards.
- Americans are expected to wager $1.7 billion on Super Bowl LX at legal sportsbooks.
- Massachusetts recently scored a major victory in the battle against prediction platforms by winning the right to request a preliminary injunction.
The announcement was released by the New York Attorney General’s press office.
According to James, customers who trade event contracts offered by prediction platforms are subjecting themselves to danger they wouldn’t find at legal sportsbooks.
“Ahead of the Super Bowl, New Yorkers need to know the significant risks with unregulated prediction markets,” James said. “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.”
Prediction market platforms are very similar to sportsbooks, but with several key differences. Whereas sportsbook bettors wager odds set by the house, prediction platform users buy and sell contracts associated with event outcomes with prices determined by the customer base.
To put these platforms' popularity into perspective, more than $47 million was risked at Kalshi, not on games or players, but on what words announcers would mention during NFL games.
Prediction operators have argued that their peer-to-peer systems should not be classified as wagering, and since they are licensed by the Commodity Futures Trading Commission, they do not need to follow state gaming regulations, such as receiving an operator’s license.
However, James’ message is a clear sign that she is not on board with the budding medium for prognostications.
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New York AG blasts “illegal” platforms
The primary concern with prediction platforms James voiced is related to their lack of consumer protection standards. According to the release, that includes:
- Funding programs to combat problem gambling
- Preventing underage gambling
- Upholding anti-predatory advertising standards
- Identifying at-risk users
- Implementing self-exclusion measures
- Using regulatory review to maintain trading integrity
James also accused prediction platforms of masquerading as betting outfits without abiding by the state’s sports wagering guidelines.
I'm also warning the prediction market industry that unlicensed sports wagering violates New York’s laws and could face civil and criminal liability.
— NY AG James (@NewYorkStateAG) February 2, 2026
My office will always defend New Yorkers and enforce the laws of our state.
Additionally, in her announcement, James stated that “the financial industry has begun issuing reports of increased financial risks associated with prediction markets, including the overextension of credit and rising loan defaults.”
The Coalition for Prediction Markets offered this rebuke on X on Tuesday.
We agree that consumers should steer clear of unregulated prediction markets.
— Coalition for Prediction Markets (@PredictAction) February 3, 2026
Our members' platforms are all regulated by the CFTC, similar to how the SEC regulates the stock market. Regulation comes with many of the guardrails the AG outlines - a ban on insider trading,…
States battling with prediction platforms
A state-level rebuke of prediction platforms is nothing new. Kalshi, Robinhood, and other platforms have been embattled by disputes in various other states, starting with states sending them cease-and-desist orders and escalating to court battles.
Massachusetts scored a significant victory in late January when a judge ruled in favor of the state, allowing a request for a preliminary injunction against Kalshi, which had motioned to dismiss the request.
Nevada, Ohio, and New Jersey have also raised legal battles with Kalshi.
