New York Sues Polymarket, Calling Its Prediction Markets an Illegal Gambling Operation

New York State has filed a lawsuit against Polymarket, accusing the prediction-market platform of operating an unlicensed and illegal gambling business.

Governor Cathy Hochul said Polymarket’s operations violate state law and could expose New Yorkers—particularly minors—to the risks of problem gambling.

“By operating an unlicensed gambling operation, Polymarket not only knowingly violates state law, but also endangers New Yorkers, especially minors who are most vulnerable to problem gaming,” Hochul said in a statement announcing the lawsuit.

New York Says Polymarket Avoids Gambling Taxes

New York State said Polymarket avoids tax obligations in the same way as licensed casinos and mobile sports-betting platforms. The state said gambling-tax revenue supports public schools, sports programs for underserved youth, and problem-gambling education and treatment.

New York law requires people to be at least 21 years old to participate in mobile sports betting. However, the state said Polymarket is available to users between the ages of 18 and 20, potentially exposing younger users to the adverse mental and economic effects associated with gambling.

New York’s Dispute With Prediction-Market Platforms

Polymarket and its biggest rival, Kalshi, offer sports-related contracts in the form of “event contracts” or “swaps.” New York officials and some courts argue that these products are gambling under a different name.

New York previously sued Kalshi over its sports-related prediction markets. The Trump administration has sided with prediction-market platforms, while the Commodity Futures Trading Commission (CFTC) has asserted that it has exclusive jurisdiction over them. In August, the CFTC declared a “market emergency” in New York to prevent the state from enforcing its gambling laws against Kalshi.

Attorney General Says Polymarket Circumvented State Law

New York Attorney General Letitia James said the state’s gambling laws are intended to protect residents, prevent the potential harms of problem gambling, and provide funding for education and other public-interest programs.

“By circumventing New York state law, Polymarket targets the most vulnerable populations and deprives New York families of critical services and assistance,” James said.

According to the state’s court filing, New York is seeking an order barring Polymarket from operating as an unlicensed gambling business. The state is also seeking fines, forfeiture of alleged illegal profits, and restitution for users.

The lawsuit was filed in New York County Court.