New York attorney general sues Polymarket
The suit accuses Polymarket of illegally marketing sports betting to New Yorkers for over a year.
Key takeaways:
- New York Attorney General Letitia James has sued Polymarket, alleging that it runs an illegal, unlicensed gambling operation in the state.
- It’s the second major prediction-market company James’s office has targeted, after a separate lawsuit against rival Kalshi.
- The complaint alleges that Polymarket has marketed itself as a sports-betting platform for over a year, citing an August 2025 promotional post on X.
- A CFTC lawsuit against New York, argues that federal law preempts state gambling rules for registered exchanges.
US.- New York Attorney General Letitia James and Governor Kathy Hochul have filed a lawsuit against Polymarket, accusing the prediction market operator of running an unlicensed gambling business in the state. The action, announced on September 24, seeks to prevent Polymarket from operating in New York and comes as state and federal authorities continue to disagree over the regulation of event contracts.
The lawsuit alleges that Polymarket’s contracts meet New York’s legal definition of gambling because users wager money on uncertain outcomes that are outside their control or depend on chance. According to the state, the company has not obtained a licence from the New York State Gaming Commission and does not meet the requirements imposed on licensed gambling operators.
The state also alleges that the platform allows people aged 18 to 20 to participate, while New York requires customers to be at least 21 to place mobile sports wagers. New York is seeking a court order to stop the alleged activity, along with fines, the forfeiture of Polymarket’s gains and restitution for users.
Polymarket has disputed the claims and said it will defend its users and platform. Chief Legal Officer Neal Kumar said James’ office was repeating arguments used in its legal action against Kalshi, which commenced in July.
Federal and state regulators remain divided
The case comes amid a dispute over whether prediction market contracts should be treated as gambling or financial products. The Commodity Futures Trading Commission has maintained that federally regulated event contracts fall within its jurisdiction, while states argued that some event contract are essentially gambling and therefore fall under state law.
The CFTC sued New York in April, seeking a ruling that federal law takes precedence over the state’s gambling restrictions in this area.
Frequently asked questions
- Why did New York sue Polymarket? Attorney General Letitia James alleges that the platform runs unlicensed betting in the state in violation of New York’s gambling laws.
- How has Polymarket responded to the lawsuit? The company denied the allegations and called the suit a recycled version of New York’s previous lawsuit against Kalshi. Chief legal officer, Neal Kumar, said Polymarket had tried to engage with the state before the suit was filed.
- Who regulates prediction markets, states or the federal government? It’s an open dispute that may have to be decided by the Supreme Court. The CFTC claims exclusive federal jurisdiction, while several states, including New York, argue that their gambling laws apply.
