New York accuses Polymarket of running illegal gambling operation in new lawsuit

New York sued Polymarket on Thursday, accusing the prediction market platform of running an illegal gambling operation.

It marks the latest lawsuit from the Empire State, which has levied similar allegations against Kalshi, Coinbase and Gemini in recent months.

“I will always stand up for New Yorkers when bad corporate actors prey on consumers and threaten tax dollars that fund schools and critical public services,” New York Gov. Kathy Hochul (D) said in a statement.

“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,” Hochul continued.

The lawsuit accuses Polymarket of operating a gambling business without obtaining a license from the state’s gaming commission or paying the associated taxes. It also argues the platform runs afoul of laws barring gambling for users younger than 21 years of age.

“We believe in New York and we’re staying here,” Neal Kumar, Polymarket’s chief legal officer, said in a statement.

“While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users,” he continued. “We didn’t run to preemptively sue the state — we chose to engage with them directly on the substance and address their concerns. They preferred the media hit.”

The New York lawsuit comes amid a growing legal battle over who has jurisdiction to regulate prediction markets. States argue the platforms, which allow users to wager on the outcome of various events, fall under their gambling laws.

Prediction markets contend they are already regulated at the federal level by the Commodity Futures Trading Commission (CFTC). Under the Trump administration, the agency has sided with the platforms and taken an increasingly aggressive approach to asserting its regulatory authority.

New Jersey recently asked the Supreme Court to weigh in on the dispute, which has seen competing decisions at the appellate level.

While the Third Circuit Court of Appeals blocked the state from enforcing its gambling laws against Kalshi earlier this year, the Ninth Circuit Court of Appeals ruled in late August that Nevada could regulate prediction markets like gambling and sportsbooks.