New York sued Polymarket on Thursday, continuing the state’s efforts to prevent prediction markets from offering event contracts without a license.
Key Takeaways
- New York’s attorney general and governor allege Polymarket’s prediction markets violate state gambling laws.
- The state wants to stop prediction markets from operating without a license.
- Polymarket doesn’t pay taxes on its revenue earned from New York traders.
New York Attorney General Letitia James and Gov. Kathy Hochul announced a lawsuit Thursday against Polymarket's domestic arm for “operating an illegal gambling operation.”
In the lawsuit, New York officials allege Polymarket’s sports event contracts violate the state’s gaming laws and are “bets” because they rely on outcomes that are out of the consumer’s control.
Operators like Kalshi and Polymarket have argued in legal cases that states have no jurisdiction over prediction markets.
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” James said in a statement. “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support. My office will never hesitate to take action to defend our laws and keep New Yorkers safe.”
Polymarket, according to James, is operating without a license from the New York State Gaming Commission, which “exposes New Yorkers - including those under the legal gambling age of 21 - to serious personal and financial risk.”
New York’s legal action comes less than two months after the Yankees, one of the state’s most popular pro teams, entered a marketing partnership with Polymarket. Multiple MLB teams have made similar prediction market agreements, while NFL and NBA teams have yet to enter similar partnerships.
Enjoying Covers content? Add us as a preferred source on your Google account
Consumer protection
The New York officials allege that Polymarket offering sports event contracts to individuals aged 18 to 20 violates state laws that require sports bettors to be 21 and older. James and Hochul also criticized Polymarket for failing to pay taxes that licensed gambling operators are required to pay.
“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,” said Governor Hochul. “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.”
New York officials challenged Polymarket’s marketing and ad campaigns, which promoted being “bad news” for sportsbooks.
The trading exchange relaunched to all 50 U.S. states in December 2025 after exiting the market in 2022 because of regulatory concerns.
Seeking damages
James asked the court to issue a permanent order prohibiting Polymarket from operating in New York without a license, as well as holding the company in violation of state laws.
The lawsuit also wants Polymarket to forfeit all illegal gaims and provide restitution to consumers who were harmed. It seeks fines equal to three times the gains Polymarket made through its alleged illegal actions.
The lawsuit requests a $100,000 penalty for “each offer or attempt to offer” sports betting in the state.
Not alone
Polymarket is the fourth prediction market platform that New York has challenged in court. James and Hochul sued Kalshi in July over similar allegations that it was operating an illegal gambling operation.
The state also went after prediction market platforms Gemini Titan and Coinbase for offering event contracts in New York without a sports betting license.
“Nobody is above the law in our state, and working with Attorney General James, we are fighting to protect New Yorkers and put this illegal operation to an end,” Hochul said.
The Commodity Futures Trading Commission, which federally regulates prediction markets, took legal action against New York and Massachusetts earlier this year in response to those states' efforts to apply state gambling laws to CFTC-registered platforms.
