Overview

Prediction-market and event-contract platforms are not licensed by the Commission to offer wagering in New York State. They, along with unlicensed, offshore online gaming purveyors, are operating unlawfully in New York.

The Commission strongly encourages New Yorkers of age to patronize licensed sports wagering operators that are required to have important safeguards and player protections in place.

The unlawful market siphons significant revenue from New York’s schools, local governments, support services for gambling harms, and charitable organizations across New York. These companies keep the profit while New Yorkers get none of the benefits.

The unlawful operators’ house rules may not be reviewed by any regulator. This makes it easy for bad actors to take advantage of unsuspecting individuals. Some unlawful operators permit dubious, dangerous and reprehensible wager options, including bets on political violence and war. They may allow insider trading, making your wager unfair when measured against market participants who possess nonpublic information that bears on the wager. Also, a bettor may be left with no recourse if the operator declines to pay advertised winnings or resolves an event contract in a way that contradicts the actual or perceived outcome.

Unlawful operators advertise and market to those who have voluntarily excluded from all forms of gambling in New York State. They also advertise on college campuses, which is prohibited in New York.

With no controls, restrictions, or meaningful oversight, the unlawful market creates an environment where unregulated actors can rip-off unsuspecting bettors, causing significant unforeseen losses. 

Risks

New Yorkers should understand what is at risk when betting in the unlawful gambling market, whether via prediction markets or offshore operators. The unlawful market:

Provides No Societal Benefit

Unlike regulated gaming, the unlawful market contributes no gaming tax revenue to important causes and instead siphons revenue from schools, local governments, and charitable organizations across the state, including resources to combat gambling harms.

Enables Youth Access

The minimum age to wager on prediction markets and many offshore platforms is 18 instead of 21, the legal age to place a sports wager in New York State. The unlawful market has no safeguards to prevent underage use, which leaves youth susceptible to the very real dangers of gambling harms. These platforms do not comply with New York requirements to avoid marketing to underage individuals, such as on college campuses.

Fails to Protect Consumers and has Serious Integrity Issues

Unlawful operators have little to no recourse or customer service to resolve disputes. They permit predatory market makers to profit off patrons of all ages.  Such operators may have no required anti-money laundering (AML) or know-your-customer (KYC) controls in place, leaving patrons’ funds, activities, and information at-risk. Patrons may be unwittingly supporting organized crime through making bets.

Essentially Answers to No One and Threatens Fair Competition

Where licensed sports wagering contributes billions of dollars in tax revenue for New York’s public schools, unlawful operators don’t pay a dime. Nor do they follow any comprehensive gambling rules. With no Commission oversight, there may be no one to hold them accountable.