Polymarket faces New York lawsuit alleging unlawful gambling operations
State officials initiated legal proceedings against the prediction markets firm, mirroring previous litigation filed against Kalshi in July for allegedly operating an unlawful gambling enterprise.
Letitia James, serving as New York Attorney General, has initiated legal action against the prediction markets platform Polymarket over its offering of contracts associated with sporting competitions.
State officials in New York filed legal proceedings on Thursday targeting Polymarket, claiming the platform's event contracts available through its prediction market violate gambling statutes within the state. This legal action came after comparable litigation was brought against Kalshi in July, as well as lawsuits targeting prediction market platforms operated by Coinbase and Gemini that were filed in April.
The filing submitted Thursday referenced Polymarket's contracts related to sporting events available through its mobile application that debuted in December 2025, with specific mention of how the company advertised to New York residents. The filing indicated that state authorities may pursue measures to restrict access to the platform for individuals residing in the state.
[Polymarket] seeks to avoid the legal and financial consequences of New York's close regulation of gambling by offering what is quintessentially wagering under the guise of 'event contracts' on a 'prediction market,'
— Court filing
This litigation against Polymarket represents another instance highlighting the ongoing conflict between state-level authorities and federal regulatory bodies regarding jurisdictional authority for regulating and providing oversight of prediction markets. Michael Selig, serving as Chair of the US Commodity Futures Trading Commission, has asserted that the federal regulatory body possesses "exclusive jurisdiction" over these companies.
In recent weeks, officials from New Jersey submitted a petition to the US Supreme Court requesting the court consider arguments in their litigation against Kalshi, hoping for a ruling that might provide clarity regarding which governmental entities should maintain oversight responsibilities for the prediction markets sector. An announcement from the court regarding whether it will address this issue has not yet been made.