Bill would ban selected event bets for New York residents

Prediction market providers would have to block New York residents from opening, holding, trading, or settling bets in the prohibited markets. Covered bets would include organized physical or mental competitions, New York state or local elections and government actions, crises and their effects, deaths or attempted killings, and markets unlawful under state or applicable federal law. Activities conducted under a New York-issued license and following its rules would be excluded. Otherwise lawful markets would be excluded from the death-market ban when a person's death only indirectly determines the outcome. The restrictions would take effect on the 90th day after the bill becomes law.

Providers would be barred from using service terms to change or remove consumers' rights under these rules. These protections would cover New York residents using prediction market platforms covered by the bill. Any agreement that violates these prediction market rules would be invalid. The contract rules would take effect on the 90th day after the bill becomes law.

New York's attorney general could enforce the restrictions and seek shutdown orders for repeated violations, and would have to issue rules needed to enforce them. Providers and other entities that violate these rules would face financial penalties. Enforcement would require reason to believe a violation harms or will harm New York consumers. It would not depend on action by the federal Commodity Futures Trading Commission. General penalties would be up to $10,000 per violation, or up to $50,000 per violation for repeated misconduct. Violating the market bans would carry a penalty of twice the profits from that market or $50,000, whichever is greater. In a court action brought by the attorney general over repeated violations, the court would have to order the provider to stop operating in New York. Operating in violation of that order would bring an additional $1 million penalty per day. Charging no money or earning no profit would not excuse violations, and other authorized penalties could also apply. The enforcement rules would take effect on the 90th day after the bill becomes law.