Lynnae Williams Journalist
Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioWith this year’s Super Bowl only days away, New York Attorney General Letitia James has come out with a strong warning for residents of the state: stay away from prediction markets. In the consumer alert issued on February 2, James described prediction markets as “online platforms offering bets masquerading as ‘event contracts.’”
Because they operate outside of New York’s licensing and consumer protection framework, consumers face increased financial risks when dealing with these platforms.
“Ahead of the Super Bowl, New Yorkers need to know the significant risks with unregulated prediction markets,” said Attorney General James. “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.”
James also put the operators of prediction markets on notice, letting them know that “the conduct, advertisement, and promotion of unlicensed sports wagering violate New York’s gambling laws and could be subject to civil and criminal liability.”
Why AG Says Prediction Markets are Riskier
The attorney general’s office says prediction markets work like gambling products, but don’t have the guardrails that New Yorkers “deserve and expect from properly licensed operators.” The alert lists the protections these platforms lack, including responsible gambling programs, underage gambling controls, limits on predatory or deceptive advertising, procedures to identify customers who may be battling addiction, and self-exclusion options.
The alert also flags compliance and solvency concerns involving prediction markets, which state regulators typically review when evaluating licensed operators, such as bans on insider trading and oversight designed to “ensure the financial stability and integrity of gambling operators.” The alert also points out that the financial industry has reported that prediction markets can create additional financial risks for users, including situations where they become overextended on credit or struggle to repay borrowed funds.
As part of its consumer guidance, the attorney general’s office recommends that New Yorkers verify that the platform they’re using is licensed by the New York Gaming Commission, treat those that are not as potentially operating illegally, and avoid betting money they can’t afford to lose.
Super Bowl Mention Markets, League Pushback, And Legislative Attention
The Attorney General’s warning lands as Super Bowl-related event contracts have taken off on prediction markets, including a specific breed called mention markets. Mention markets allow users to bet on whether a Super Bowl announcer will use a specific phrase.
According to ESPN reporting, bettors on Kalshi have wagered upwards of $47 million on what broadcasters like Mike Tirico and Cris Collinsworth might say during the game. Mention markets have come under fire because they’re viewed as easy to manipulate, since the wager is tied to a discrete utterance that a speaker can influence, whether they intend to or not.
During the Grammy Awards on February 1, host Trevor Noah poked fun at mention markets in a video clip that quickly went viral. While looking into the camera, Noah said, “If you had me saying ‘potato’ on Polymarket, you just made a ton of money. So congratulations, @noah_22, whoever that is.”
Although delivered in jest, and potato wasn’t actually an option on the platform at the time, the comment highlighted one of the main concerns about mention markets: a single person’s words can directly determine the outcome of a wager.
The NFL is distancing itself from prediction markets, adding them to the league’s “prohibited list” of advertising and banning their commercials from airing during Super Bowl LX, sources told Front Office Sports.
The consumer alert from the New York Attorney General’s Office also references insider betting as something prediction markets don’t protect against. Insider trading on prediction markets has been a big issue, garnering the most attention after a newly created wallet on Polymarket’s international platform placed a suspiciously timely bet on Venezuelan President Nicolás Maduro being removed from office hours before he was captured by U.S. Special Operations Forces. The wager netted the users more than $400,000, raising questions about what they knew and when they knew it.
In response, Rep. Ritchie Torres (D-NY) introduced legislation that would prohibit government officials from trading on prediction markets if they possess material nonpublic information. The proposed legislation aims to close an “ethics gap” and apply insider-trading principles to the event-contract space.
With the Super Bowl poised to introduce prediction markets to an even wider audience, James’ warning is an alert to consumers that these platforms may not deliver what they promise and a signal that New York is prepared to treat unlicensed sports wagering-style activity, including their marketing and promotion, as a legal risk for operators doing business in the state.
