New York could force prediction markets to issue refunds

And Climate Act advocates are pushing back on Hochul's narrative.

Good afternoon — It’s Tuesday and St. Patrick’s Day.

In today’s CapCon:

• New York’s gambling regulators are speaking with lawmakers about what to do about prediction markets like Kalshi, which they view as illegal.

• The state Gaming Commission is also moving forward with plans to draft regulations around abuse of online sports wagering.

• Environmental advocates challenged Hochul’s characterization of a court case on her administration’s climate policies Tuesday.

• Here’s the scheduled at the state Capitol for Wednesday, March 18.

• Utility companies would have to show how the money they collected has been spent over several years through a new bill.

Names in today’s CapCon: Kathy Hochul, Brian O’Dwyer, John Crotty, Martin Mack, Rachel Spector, Kevin Parker, Emerita Torres, George Borrello

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(Photo by Nikolas Kokovlis/NurPhoto via Getty Images)

🎲 New York seeks new guardrails for sports betting amid problem gambling surge

State regulators of gambling in New York intend to seek new regulations to curb abuse of online sports wagering, including the use of biometric tools like facial recognition.

New York legalized online sports wagering four years ago and, since then, demand for treatment for problem gambling has increased, according to the New York Council on Problem Gambling.

That’s been lucrative for New York, which generated about $1 billion in state revenue from the online sports wagering industry alone last year. That number — the result of about $22.8 billion in online sports wagering bets — is expected to grow this year.

Gov. Kathy Hochul directed the state Gaming Commission to consider ways to combat the issue of problem gambling in January and its members met this week to take the first step.

But an unrelated issue was also raised at the meeting: the perversion of prediction markets, online platforms like Kalshi and Polymarket that allow users to bet on the outcome of real-world scenarios.

Users can place bets on the outcome of an election or the direction of the economy, for example.

That hasn’t sat well with the members of the Gaming Commission, which issued a cease and desist letter to Kalshi in October. The letter demands that the company stop operating and advertising in New York, which has strict rules on gambling.

The state constitution prohibits all forms of gambling unless they’ve been explicitly legalized through an amendment or a change in law. That’s what happened with online sports betting.

Prediction markets have not been legalized in New York but Kalshi continues to allow residents to use its platform. It sued the state Gaming Commission over the cease and desist letter last year. That case is ongoing.

Brian O’Dwyer, chair of the state Gaming Commission, said when the topic came up this week that, if they win the case, the state could seek restitution on behalf of people who bet on those platforms.