New York Sues Polymarket Over Alleged Illegal Gambling Operation

New York State sued prediction market platform Polymarket on Thursday, alleging the company is operating an unlicensed gambling operation. The state is seeking a court order to block Polymarket from operating within New York.

The lawsuit is the latest legal challenge from a state moving to rein in betting apps that allow users to wager on various events, including sports, weather, elections, and technology.

Prediction market platforms have argued that states lack the authority to regulate them, asserting they are already regulated at the federal level by the U.S. Commodity Futures Trading Commission (CFTC).

New York officials filed the lawsuit in state court, seeking fines and restitution for users, as Polymarket allegedly did not obtain a required gaming license from the state. New York has previously sued other platforms, such as Kalshi, Coinbase, and Gemini, using similar arguments.

"By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming," Governor Kathy Hochul said in a statement. Polymarket's Chief Legal Officer Neal Kumar stated, "We'll fight for our users."