Prediction markets, sometimes described as event contract platforms, allow users to speculate on the outcome of future events ranging from sports contests to elections and cultural milestones. Examples include the 2028 Democratic Presidential nominee, the Premier League Winner, and the number of tweets published by Elon Musk between particular dates. Prediction market operators generally describe these products as financial instruments rather than gambling, often asserting that they are subject to federal oversight by the Commodity Futures Trading Commission (CFTC) rather than state law. As these platforms have expanded in visibility and scope, questions have emerged about how they intersect with state gaming laws, consumer protection frameworks, and enforcement authority.

In response, several state attorneys general have issued cease-and-desist letters to prediction market operators, arguing that certain offerings functionally resemble wagering activities that are subject to state law. While much of the regulation of prediction markets has occurred through enforcement actions and regulatory correspondence, state legislatures have begun to examine whether statutory changes are needed to address prediction markets directly. Heading into 2026, New York and Pennsylvania offer early examples of how states are approaching prediction markets from different angles.

---

Prediction Market Legislation Introduced in New York

In November 2025, New York lawmakers introduced Assembly Bill 9251, a proposal to create a comprehensive statutory framework for prediction markets under the state’s General Business Law. The legislation, titled the Oversight and Regulation of Activity for Contracts Linked to Events Act, or ORACLE Act, was referred to the Assembly Committee on Consumer Affairs and Protection.

The bill would broadly define prediction markets to include any platform that allows consumers to open speculative positions on future events using a bid-ask structure. The proposal would set a minimum participation age of 21 and require platform-level exclusion policies, including self-exclusion mechanisms. It would also implement a range of responsible gaming measures, including deposit and spending limits, time-based usage notifications, and the prominent display of the HOPE NY problem gambling hotline.

Notably, the legislation would prohibit several categories of prediction markets entirely for New York residents. These would include athletic event markets, political markets, catastrophic event markets, death-related markets, and markets tied to securities prices. The bill would grant the New York Attorney General enforcement authority, including rulemaking power and broad civil enforcement tools such as injunctions, monetary penalties, and orders to cease operations within the state. If enacted, the bill would take effect 1 year after becoming law, signaling a structured legislative approach to oversight of prediction markets.

---

Hearing Held in Pennsylvania on Prediction Markets

Pennsylvania’s legislative activity has taken a more exploratory form. On December 16, 2025, the Pennsylvania House Gaming Oversight Committee held an informational hearing focused on prediction markets and their relationship to existing gaming laws. Lawmakers examined the recent expansion of event contract platforms into sports-related outcomes, and the operators’ assertion that such activity falls under federal rather than state oversight.

Testimony from the Pennsylvania Gaming Control Board highlighted similarities between prediction market contracts and traditional sports wagering, while also pointing to differences in regulatory treatment, age requirements, and consumer protection tools. Board officials discussed how Pennsylvania’s regulated gaming system incorporates licensing standards, responsible gaming requirements, and a centralized self-exclusion program, and raised questions about how prediction market platforms fit within that framework. The Committee also discussed fiscal considerations, particularly the contrast between taxed sports wagering activity and prediction market participation, which may not generate comparable state revenue under current law.

The Committee also heard from the Council on Compulsive Gambling of Pennsylvania, which addressed consumer-facing issues associated with prediction markets, including platform accessibility through mobile applications and participation by younger users. The organization shared data reflecting increased helpline contacts from younger adults and discussed the absence of certain consumer safeguards commonly required of regulated gaming operators. While the hearing did not result in proposed legislation, it reflected growing legislative interest in regulating prediction markets as federal litigation and enforcement activity continue to evolve.

---