New York Attorney General Sues Polymarket Over Alleged Illegal Gambling Operation
New York Attorney General Letitia James has filed a lawsuit against the prediction markets platform Polymarket, accusing it of violating state gambling laws. The lawsuit focuses on Polymarket's contracts related to sporting events offered via its mobile app launched in December 2025. This action follows similar legal proceedings against other prediction market platforms including Kalshi, Coinbase, and Gemini.
Details of the Lawsuit Against Polymarket
Filed on Thursday by New York state officials, the lawsuit claims that Polymarket’s sports event contracts effectively function as bets, violating the state's gambling regulations.
The filing also points to Polymarket’s advertising targeting New York residents and notes that authorities could seek to block access to the platform within the state.
Background of Legal Actions in the Industry
This lawsuit followed prior legal actions against other prediction market platforms: an action against Kalshi in July, and litigation involving platforms operated by Coinbase and Gemini in April.
These developments highlight ongoing disputes between state authorities and the US Commodity Futures Trading Commission (CFTC) regarding who holds jurisdiction over prediction market regulation.
Michael Selig, Chair of the CFTC, has asserted that the federal commission has exclusive authority in overseeing such companies.
Legal Regulatory Uncertainty
Earlier this month, New Jersey officials petitioned the US Supreme Court to hear arguments in their case against Kalshi, aiming to clarify regulatory oversight of prediction markets.
As of now, the Supreme Court has not decided whether to take up the case.
The current legal disputes underline a lack of clear federal regulation, leading to clashes between state governments and federal agencies.
Why it matters
The new lawsuit against Polymarket continues the ongoing power struggle between state regulators and federal agencies over oversight of the prediction markets industry. Without clear federal guidelines, states are applying their gambling laws to these platforms, generating legal uncertainty and the possibility of blocking access for users. The US Supreme Court’s potential ruling in the Kalshi case could establish an important precedent delineating regulatory authority between states and the Commodity Futures Trading Commission (CFTC). This is crucial for the industry, as prediction markets involving sports events and other contracts are rapidly expanding, and their legal status directly impacts market development and investor confidence.
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