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New York Attorney General Letitia James and Governor Kathy Hochul sued Polymarket on Thursday, asking a court to block the prediction-market platform from operating in the state. They allege Polymarket runs an unlicensed gambling operation, targets vulnerable users and exposes underage New Yorkers to problem gaming. New York is also seeking at least $100,000 in fines and an order stopping the company's business and advertising until it registers.
Why it matters
New York prosecutors argue that Polymarket's contracts meet the state's definition of gambling and therefore require a license from the New York State Gaming Commission. They also accuse the platform of avoiding taxes tied to regulated gambling. The state says those taxes support public schools, youth sports programs and problem-gambling education and treatment.
The lawsuit expands a broader regulatory dispute over whether prediction markets should be governed primarily by state gambling laws or federal oversight. New York sued Kalshi over similar allegations in July, while Massachusetts and Rhode Island have also pursued legal action involving Kalshi and Polymarket.
Market impact
The case raises regulatory risk for prediction-market operators seeking to scale across the United States. A court order against Polymarket could affect its ability to offer contracts, advertise and maintain operations in one of the country's largest markets.
Polymarket Chief Legal Officer Neal Kumar said the company is staying in New York and has been working with officials to address their concerns. He said Polymarket was founded in a New York City apartment and now has more than 350 employees in the state. The court fight will test how far state authorities can go to restrict a platform operating at the intersection of derivatives, information markets and gambling.
Frequently asked questions
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Why is New York suing Polymarket?
New York alleges that Polymarket operates an unlicensed gambling business and that its contracts meet the state's definition of gambling. The state is asking a court to block the platform from operating there.
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What penalties is New York seeking against Polymarket?
New York wants Polymarket to stop doing business and advertising in the state until it registers with the New York State Gaming Commission. The state is also seeking at least $100,000 in fines.
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What does New York say Polymarket avoided?
New York prosecutors accuse Polymarket of avoiding taxes associated with regulated gambling operations. The state says those taxes support schools, youth programs and problem-gambling services.
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How does the case affect the wider prediction-market fight?
The lawsuit adds to a dispute over whether prediction markets should be regulated mainly by states or by the federal government. New York, Massachusetts and Rhode Island have also pursued actions involving Kalshi and Polymarket.
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What has Polymarket said about its New York operations?
Polymarket Chief Legal Officer Neal Kumar said the company is staying in New York and has been working with officials to address their concerns. He said the company now has more than 350 employees in the state.
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