New York Attorney General Letitia James speaks to the media after attending a hearing and pleading not guilty to charges that she defrauded her mortgage lender, in the U.S. District Court for the Eastern District of Virginia, in Norfolk, Virginia, U.S., October 24, 2025.
Jonathan Ernst | Reuters
Days before Super Bowl 60, New York Attorney General Letitia James has a message for consumers: Be careful when trading on prediction markets.
“New Yorkers need to know the significant risks associated with unregulated prediction markets,” James said in a statement Monday.. “It’s very clear: so-called prediction markets do not benefit from the same consumer protections as regulated platforms. I urge all New Yorkers to pay attention to these platforms in order to protect their money.”
Prediction platforms like Kalshi and Polymarket are expected to generate billions of dollars in trading volume around the Super Bowl.
Consumers can transact on gaming events, similar to online sports betting like DraftKings Or FanDuel — as well as on predetermined outcomes, such as which companies will advertise during the Super Bowl, an issue reported by CNBC Sport last week.
James said the platforms’ products are bets “masquerading as event contracts”.
Kalshi declined to comment. Polymarket representatives did not immediately respond to request for comment.
James warned that concerns over the burgeoning prediction market industry include “compliance with prohibitions against insider betting and the requirement for regulatory review to ensure the financial stability and integrity of gambling operators.”
“Prediction markets may appear like modern, high-tech platforms for speculation or ‘forecasting,’ but in practice many operate like unregulated games of chance, without the basic protections that New York consumers deserve and expect from properly licensed operators,” James said in the release.
Prediction market contracts trade quite similarly to all-or-nothing options, with contracts priced between $0 and $1. Contracts trade up or down depending on the action.
In addition to Super Bowl ad deals, Polymarket and Kalshi are offering other game-related trades, including questions like “What songs will be played at halftime?”
There are laws that prohibit insider trading in prediction markets, just like in traditional financial markets. But industry experts say they are skeptical that the Commodity Futures Trading Commission, recently abolished as part of widespread government budget cuts, has the will or means to control these problems.
Last week, CFTC Chairman Michael Selig said he had asked the agency’s staff to withdraw a proposed rule that would have banned the trading of predictions on sports and politics. He said new rules would be coming.
Disclosure: CNBC maintains a business relationship with Kalshi.