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New York State Regulates New Trends in Prediction Markets: Trading of Political and Sports Events Faces Strict Regulations
The New York State Legislature plans to reintroduce the ORACLE Act in November 2025. This new regulatory proposal will redefine the legal framework for prediction markets by amending Chapter 48 of the General Business Law. According to the draft regulation, exchanges and market participants will be explicitly prohibited from offering derivative contracts related to political elections and sporting events.
Strict Trading Restrictions
The bill not only sets trading bans for specific event types but also establishes a series of supporting market operation requirements. These include restrictions on user age, platform market access standards, advertising compliance standards, and regulatory provisions to prevent price manipulation. These regulations aim to protect investors’ interests and prevent malicious market manipulation.
Neutral Outcome Clause Allows Flexibility
Interestingly, the draft does not completely ban all sports-related contract trading. Objective and neutral results, such as “league win/loss,” may still be permitted, indicating that New York regulators are trying to strike a balance between consumer protection and encouraging financial innovation. This selective prohibition policy reflects legislators’ nuanced assessment of prediction market risks.
Analysis of Regulatory Intent
Overall, the reintroduction of the ORACLE Act marks a shift in the attitude of U.S. states toward prediction markets. From complete laissez-faire to targeted regulation, this process reflects both the industry’s maturation needs and regulators’ emphasis on risk prevention. Market participants should closely monitor this legislative development.