Addabbo set to open New York legal review to potentially regulate prediction markets

New York is now formally examining whether it has the power to regulate prediction markets, with State Senator Joseph Addabbo Jr. telling ReadWrite he is already consulting with Senate legal counsel on a review that will guide potential legislative action when the new session begins in January.

In an exclusive conversation with ReadWrite, Addabbo said he is currently working to figure out what authority New York might have over new prediction market platforms. His review comes as Assemblymember Clyde Vanel recently proposed the ORACLE Act, a bill aimed at regulating prediction markets in the state. “What we do is seek legal counsel about this and other bills, which will take the holidays. That’s what we do. So let’s see,” he said, noting the review is still preliminary.

Addabbo’s warning comes at a time when prediction market operator Kalshi has already taken the New York State Gaming Commission to court after being told that its political contracts might break state gambling laws. At the same time, Congress is considering different federal approaches, including the proposed AB 9251 bill, that could change which agencies oversee prediction markets across the country.

I guess we’re just filing lawsuits on weekends now. Kalshi files a preemption suit against New York. pic.twitter.com/wAKyeWD5c3

— Andrew Kim (@akhoya87) October 27, 2025

‘Very little guardrails’

Addabbo, who played a key role in creating New York’s regulated mobile sports betting system, said his top priority is protecting consumers, especially when it comes to gambling addiction.

He compared the rapid growth of sweepstakes casinos to the sudden rise of prediction markets in New York, noting that both trends raise similar concerns. “When we look even [at] the sweepstakes casinos… we haven’t legalized online gaming yet in New York. And yet here we were faced with these sweepstakes casinos generally doing online gaming in New York,” he said.

He said the risk with prediction markets is much the same, only with fewer safeguards in place.

“These particular markets have very little guidelines or guardrails or safety measures for those who may have a gaming addiction. That’s my primary concern.” – Sen. Joseph Addabbo Jr.

He contrasted this with New York’s regulated mobile sports betting ecosystem, which he called “maybe the number one product in the country” and one that has “raised us about $0.5 billion in revenue” for education.

He warned that prediction markets could undermine that progress if they are allowed to expand without proper oversight.

“When you have outside entities doing things in the gray area, maybe illegally… it’s cutting into our educational funds,” he added.

State vs. federal power: ‘What can we do within our jurisdiction?’

Across the country, prediction markets sit in a murky legal area. Some operators treat them like financial derivatives overseen by the Commodity Futures Trading Commission (CFTC), while many states see them as gambling products.

Addabbo said he is well aware of that tension.

“You know, what jurisdiction do we have as a state? You look at the court cases… there’s a lot. But I always look at what we can do within the jurisdiction of the state,” he said.

The senator said he plans to look closely at whether New York should take early legislative action, wait for clearer direction from the federal level, or try a mix of both. He pointed to his colleague Vanel’s bill as an early sign of where the conversation might go, but stressed that figuring out who has authority over these markets is still the key issue.

“Once the bill is introduced, then they go research and everything else… I get to try legal counsel and say, what can we do within New York’s jurisdiction?” he explained.

Are prediction markets gambling, finance, or something else?

When asked how he personally sees prediction markets, Addabbo said the label might matter less than the risks to consumers and the gaps in oversight.

He cautioned that prediction contracts involving elections, politics, or entertainment could “creep into” the mobile sports betting world, an area where New York already has clear authority and significant financial interests.

“We regulate… to make sure it’s safe. That’s my concern. I want to have when we start off that we regulate,” he said.

While he acknowledged that some operators argue they fall under CFTC oversight, Addabbo repeated that the state still has a duty to shield New Yorkers from products that may be risky or predatory.

For him, the urgency is not only about money but also about fast moving technology. “The accessibility of these games… we have to be concerned,” he said, adding, “You want to be ahead of the curve, you don’t want to be reactive.”

What comes next: a January update

Addabbo expects to have a better sense of the situation early in the new legislative session in January, but he said he plans to start looking more closely at the bill as soon as next week.

With state and federal regulators at odds over who should shape the future of prediction markets, and with operators already battling New York in court, the next few months could decide how firmly these platforms establish themselves in one of the country’s most important betting markets.

Featured image: Senator Joseph Addabbo Jr via New York Senate

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