NYC Cracks Down on Crypto Prediction Markets as NHL’s Rangers Score Controversial Polymarket Deal

Regulators draw a line in the sand while sports teams sprint across it.

New York's financial watchdogs are sharpening their claws—again. This time, their target isn't a shady exchange or a dubious token, but the entire concept of crypto-based prediction markets. Platforms that let users bet on everything from election outcomes to celebrity gossip using digital assets are now in the crosshairs. The message is clear: if it looks like gambling and trades like a security, New York will treat it as both.

Meanwhile, On the Ice, a Different Game

As regulators issue warnings, the New York Rangers skate in the opposite direction. The Broadway Blueshirts just inked a sponsorship deal with Polymarket, one of the very prediction platforms drawing regulatory heat. It's a classic sports move—chase the new money, worry about the optics later. The partnership will splash the Polymarket brand across Madison Square Garden, effectively using 18,000 fans as a captive audience for a product their own state is questioning.

A Clash of Titans (and Timing)

The simultaneous crackdown and sponsorship create a surreal dissonance. One arm of New York governance is signaling a risky, borderline industry. Another iconic New York institution is embracing it for a paycheck. It's the perfect encapsulation of crypto's current moment: fraught with regulatory peril, yet increasingly woven into the mainstream fabric—especially where young, tech-savvy demographics gather.

Finance's old guard might scoff at 'sports betting for nerds,' but the market doesn't care. Capital flows where attention goes, and right now, attention is on turning speculation into a sport. The Rangers just placed their bet. Whether it pays off or gets called for a penalty depends on who blows the whistle next.

Dune data reveals sports betting popularity on prediction markets

Dune analytics data recently revealed that sports event betting on Polymarket accounted for nearly 37% of the platform’s notional trading volume. Meanwhile, sports betting on Kalshi, which backs prediction market offerings for Robinhood and Coinbase, accounts for 93% of the notional trading volume. Kalshi’s notional trading volume exceeded $2.3 billion across both companies.  

 Thursday’s deal between Polymarket and Rangers gives the prediction market exclusive rights to display odds at Madison Square Garden during games. Publicly traded Madison Square Garden Sports (MSGS) unveiled the deal in a press statement. 

MSGS said Polymarket WOULD henceforth be featured through digitally enhanced LED signage marking the perimeter of the hockey rink. The company also revealed that Polymarket will have a dedicated post-game segment, and its branding will be featured outside MSGS’s stadium in Manhattan. 

“Polymarket becomes not just an Official Partner of the Rangers, but they will also be involved across digital channels, fan activations, and promotions at Rangers games.”

–Jamaal Lesane, CFO at MSG Sports

Meanwhile, supporters of prediction markets argue that these platforms offer more accurate forecasts than traditional or professional polls by using the wisdom of the crowd. However, critics caution that most prediction markets are just illegal gambling platforms that lack basic consumer protection. 

On the other hand, prediction markets that continue to operate in the Big Apple after a court issues a cease-and-desist order will be fined $1 million for every day they remain operational in the state. Other ORACLE Act violations will attract smaller civil fines as low as $10,000.  

Legislation encourages user participation in self-regulation

Vanel’s legislation requires prediction markets to include a feature that allows users to limit the time they spend gambling on such platforms voluntarily. The bill also enforces age restrictions and prevents users from using credit cards to fund bets.

Vanel also proposed another bill in April 2025, directing the New York State Board of Elections to study the use of blockchain technology to protect election results and voter records. Assembly Bill A7716, currently before the Assembly Election Law Committee, calls for a comprehensive report evaluating blockchain’s potential as a tool for election integrity within one year. The legislation describes blockchain as a decentralized ledger that delivers the uncensored truth. 

The legislation also requires the Board of Elections to collaborate with the Office of Information Technology Services and engage professionals in cybersecurity, election systems, blockchain, and voter fraud. If the bill advances, the final report must include an assessment of the viability of blockchain technology in other jurisdictions and states. However, it is now under committee review pending amendments or approval.

Meanwhile, U.S. Rep. Ritchie Torres introduced another bill earlier this week prohibiting federal employees from participating in prediction markets while possessing insider knowledge of relevant information. However, Loxley Fernandez, the co-founder and CEO of DASTAN, believes that insider trading can be viewed as a valuable feature, rather than a bug. He noted that prediction markets have long been mistakenly categorized together with traditional financial markets, which is wrong.

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