New York State Attorney General Letitia James speaks to the media after attending a hearing and pleading not guilty to charges of defrauding mortgage lenders in front of the U.S. District Court for the Eastern District of Virginia in Norfolk, Virginia, U.S. on October 24, 2025.
Jonathan Ernst | Reuters
Days before Super Bowl 60, New York State Attorney General Letitia James has a message for consumers: Be careful when trading in prediction markets.
“New Yorkers need to know the significant risks of unregulated prediction markets,” James said in a statement Monday. “This much is clear: so-called prediction markets do not have the same consumer protections as regulated platforms. We urge all New Yorkers to be wary of these platforms to protect their money.”
Forecasting platforms like Kalshi and Polymarket are expected to generate billions of dollars in trading volume around the Super Bowl.
Consumers can trade on gaming events as well as online sportsbooks such as: draft kings or fan duel — A similar problem with predetermined outcomes, such as which companies run ads during the Super Bowl, as reported by CNBC Sports last week.
James said products on these platforms are commonly bets “under the guise” of event contracts, which are regulated by the Commodity Futures Trading Commission.
Carsi initially declined to comment, but in a statement later Monday said, “We agree that consumers should avoid unregulated prediction markets. All of our member platforms are regulated by the CFTC, just as the SEC regulates the stock market. Regulation comes with many guardrails outlined by the AG, including no insider trading, self-exclusion, and responsible trading guidelines. We all want the same thing: safe, fair, and legitimate products.”
Representatives for Polymarket did not respond to requests for comment.
James warned that concerns surrounding the nascent prediction markets industry include “supporting bans on insider gambling and calling for regulatory reviews to ensure the financial stability and health of gambling operators.”
“While prediction markets may appear to be modern, high-tech platforms for speculation and ‘predictions,’ in reality, many operate as unregulated gambling without the basic protections that New York consumers deserve and expect from properly licensed operators,” James said in a statement.
Prediction market contracts trade somewhat like all-or-nothing options, with contract prices ranging from $0 to $1. Depending on the action, the contract will trade up or down.
As CNBC reported last week, in addition to the Super Bowl commercial deal, Polymarket and Calci are also offering other deals related to the game, including questions like “What song will be played during the halftime show?” and “Who will be at the big game?” as well as more traditional sportsbook “bets” such as “Seattle vs. New England: Most Rushing Yards.”
As with traditional financial markets, there are laws prohibiting insider trading in prediction markets. But industry experts say they are skeptical that the CFTC, which was recently disbanded as part of broader government cuts, has the will or means to police such issues.
Last week, CFTC Chairman Michael Selig announced that he had directed CFTC staff to withdraw a proposed rule that would have prohibited predictive trading in sports and politics. There will be new rules, he said.
Disclosure: CNBC has a commercial relationship with Kalsi.
