New York Banned Sweepstakes Casinos, Will It Ban Prediction Markets As Well?
Sweepstakes casinos have been officially banned in New York for over six months now.
In December last year, Gov. Kathy Hochul signed bill S5935A into law, making it so that dual-currency sweepstakes casinos simulating casino play would no longer be able to operate in the Empire State.
New York wasn’t the first to issue a ban against sweepstakes casinos, as Montana, Connecticut, and several others had all passed their own legislative bills earlier that year, but it was certainly the most impactful ban next to California.
The ban came following concerns over the dual-currency virtual betting system used by sweepstakes casinos, as well as celebrity promotion deals that have led to thousands of players signing up with these sites, as covered on SweepsKings.com.
Off the back of New York’s crackdown, popular operators lost a significant number of players and the projected revenue for the US sweepstakes casinos took a hit. Eilers & Krejcik Gaming (EKG) reduced the estimated figure from $4.6 billion in 2026 to $4 billion instead, driven largely by the recent state bans. And in the aftermath of New York’s harsh ban on the sweepstakes market, some are questioning whether state lawmakers will take the same approach to prediction market sites like Kalshi and Polymarket, both of which are causing explosive growth among young Americans.
New York Opted to Ban “Dangerous” Sweepstakes Casinos
You can actually go as far back as the COVID-19 pandemic to pinpoint exactly when sweepstakes casinos first got popular.
During that time, millions of Americans were stuck at home and so turned to these free-to-play, prize-promising sweepstakes casinos, not least because they were accessible in close to every single state at that time due to following a grey area sweepstakes model.
The years following saw the sweepstakes casino market explode into a billion-dollar space, with sites like Chumba Casino and Stake.us raking in millions of players in the process.
However, following legal concerns, lawmakers in New York decided to take a closer look at sweepstakes casinos and decided they mimicked real-life gambling far too closely to be left alone, giving players the opportunity to purchase virtual ‘Sweeps Coins’ which could then be redeemed for prizes if they won enough of them.
Attorney General Letitia James out of New York labelled these casinos as “illegal, dangerous,” and holding the power to “seriously ruin people’s finances.”
The proposed anti-sweepstakes casino bill easily passed through both chambers in the summer of 2025 before it was signed into law by Gov. Kathy Hochul just before the end of the year, sparking backlash from disappointed players across social media and popular forum sites like Reddit.
The message from New York was that the state is anti-grey area gambling and would not allow sites like sweepstakes casinos to continue operating unregulated.
But since the ban against sweepstakes casinos took place, prediction market sites have completely taken off throughout New York and most other states in the US, providing Americans with yet another way to go about ‘gambling’ in a non-traditional way.
State Regulators Push to Block Kalshi and Polymarket
Just like with sweepstakes casinos, New York regulators have turned their attention to the booming prediction market and are currently pushing to block the likes of Kalshi, Polymarket, and other similar sites.
Kalshi is largely at the center of it all, a platform that allows people to place bets on future events like politics, pop culture moments, and sports that was recently valued at $22 billion.
In October last year, the New York State Gaming Commission sent Kalshi an abrupt cease-and-desist letter, which Kalshi immediately responded to by requesting an injunction, claiming the NYGC couldn’t enforce state gambling laws against it because Kalshi isn’t a traditional gambling platform.
A judge denied this request several weeks ago and Kalshi has since opted to appeal it.
Prior to the appeal, Gov. Kathy Hochul and NY State Attorney General Letitia James applauded the move against prediction markets in a joint statement, saying:
“New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them. Yesterday, they lost in court.
“We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets.”
However, Kalshi’s appeal ultimately means it can continue operating in the state for now until the legal battle is resolved.
Back in April 2025, New York Gov. Kathy Hochul even signed an executive order banning all state employees from ever using prediction market sites like Kalshi and Polymarket following reports of insider trading at the White House.
If New York is successful in its efforts to classify prediction markets like Kalshi as illegal gambling under state law, it would be a landmark moment and the biggest blow yet to be delivered to the prediction market industry, which is experiencing unparalleled levels of growth in the US at this moment.
President Donald Trump Remains Supportive of Prediction Markets
Despite the controversy surrounding prediction markets and other grey area gambling sites, President Trump’s administration remains highly supportive of them.
At the UFC’s Freedom 250 event on the South Lawn of the White House last month, Polymarket was even plastered over the cage as an official sponsor.
Trump’s social media platform, Truth Social, has also launched its own crypto-based prediction market Truth Predict following the recent rise of prediction betting.
Even though New York could be successful in its attempts to ban or highly regulate prediction market sites, they certainly won’t be disappearing from the wider US any time soon.
