USA · updated 1h ago · 2 min read
New York Attorney General Letitia James Sues Polymarket Over Illegal Gambling Operation
NY AG filed suit accusing Polymarket of illegal gambling in New York without a license. The suit seeks to stop Polymarket from operating in the state and impose fines.
Whether the lawsuit is ‘copy/paste’ vs routine escalation.
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Futurism
“While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users.”Read the original ↗
Reuters
“filed her petition in a state court in Manhattan, two months after bringing a similar case against rival Kalshi”Read the original ↗
Futurism criticises the AG’s lawsuit as a copy/paste recycled case, while Reuters frames it as part of a standard crackdown timeline.
James sues Polymarket
New York Attorney General Letitia James filed a lawsuit in state court in Manhattan against Polymarket, accusing the prediction market of operating an illegal gambling operation without required licenses from the New York State Gaming Commission. New York Governor Kathy Hochul said, "By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law," and she added that the company "has put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming."
The petition sought civil fines, the forfeiture of illegal gains, and full restitution to customers. The case escalated New York's battle against prediction markets, coming two months after James brought a similar case against Kalshi and five months after filing similar petitions against Coinbase Financial Markets and Gemini Titan.
Company vows to fight
Polymarket Chief Legal Officer Neal Kumar said the company would fight for its users, telling Reuters, "We chose to engage with them directly on the substance and address their concerns." RKumar added, "They preferred the media hit," and he said, "Any time the (attorney general's) office wants to swing by, our door is open for a conversation" about protecting consumers.
New York objected to Polymarket letting 18- to 20-year-olds use its platform despite a minimum age of 21 under state law for mobile sports betting. New York argued Polymarket was "exposing New Yorkers to gambling addiction with few, if any, safeguards," and the petition included examples such as whether the Los Angeles Dodgers would defeat the New York Mets on July 24, 2026 by more than 1.5 runs.
Regulatory fight ahead
The lawsuit added to a broader dispute over who regulates prediction markets, with Reuters saying the Commodity Futures Trading Commission claimed "exclusive authority" over the companies. RFederal appeals courts were divided over who should oversee the industry, raising the prospect the US Supreme Court may need to decide.
The action followed a similar lawsuit against Kalshi in July and described New York officials filing the Polymarket case alleging that Polymarket's sporting event contracts violated state gambling laws. The filing said, "[Polymarket] seeks to avoid the legal and financial consequences of New York’s close regulation of gambling" by offering what it called "quintessentially wagering" under the guise of "event contracts" on a "prediction market."