New York sues Polymarket over alleged unlicensed gambling

New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit on September 24 against the domestic branch of the prediction market Polymarket. According to the Attorney General's office, the state is seeking a court order "stopping Polymarket from operating as an unlicensed gambling business in New York state."

New York's fourth prediction market case

The filing follows two earlier suits from the same office. James filed a similar case against Kalshi in July, and in April she sued Coinbase Financial Markets and Gemini Titan. New York is one of several states that treat prediction markets as gambling operations rather than financial products.

Some of those state-level suits, including the new action against Polymarket, also claim the platforms allow underage betting. Most prediction market users must be over 18, while the minimum age for sports betting in many states is 21.

The CFTC pushes back

The US Commodity Futures Trading Commission has intervened on the industry's side and counter-sued some states over their regulatory efforts. The federal agency argues it should be the sole regulator of prediction markets and that the states' legal actions fall outside their jurisdiction.

Courts remain split

Judges have reached opposite conclusions so far. In the first ruling on the question, a panel of the 3rd US Circuit Court of Appeals sided with the CFTC over New Jersey. Last month, the 9th Circuit Court of Appeals favored Nevada's case against Kalshi, blocking the company's attempt to keep the state from regulating its activities.