New York sues Polymarket to halt unlicensed gambling

New York’s Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit today against the domestic branch of Polymarket, demanding a court order that stops the company from operating as an unlicensed gambling business in the state. The suit seeks to halt all betting activities on the platform within New York, arguing that the service falls under the state’s gambling laws.

The action follows a broader push by several states to regulate or shut down prediction‑market platforms. Earlier this year, New York sued Kalshi, and in April it filed suits against Coinbase Financial Markets and Gemini Titan. State regulators claim these markets facilitate illegal gambling, including underage betting, even though most users must be over 18 and many states set the minimum age for sports betting at 21. The state’s legal team says the platforms’ lack of licenses and oversight make them unlawful.

The federal Commodity Futures Trading Commission (CFTC) has counter‑sued some states, asserting that it alone should regulate prediction markets and that state lawsuits exceed its jurisdiction. Courts have split on the issue: a panel from the 3rd U.S. Circuit Court of Appeals sided with the CFTC in a New Jersey case, while the 9th Circuit Court of Appeals recently ruled in favor of Nevada’s attempt to regulate Kalshi. Polymarket’s chief legal officer, Neal Kumar, said the company was founded in a small New York apartment and now employs more than 350 people in the city. He pledged to defend the platform’s legality and offered to discuss consumer protections with state officials, calling the lawsuit a “recycled” attack that will be challenged.

The outcome of the lawsuit could set a precedent for how states and the federal government handle prediction‑market platforms nationwide. If New York succeeds, other states may follow suit, tightening restrictions or demanding licensing. Conversely, a ruling in favor of Polymarket could reinforce the CFTC’s claim to exclusive jurisdiction, limiting state intervention. The court’s decision will likely prompt further legal battles and shape the future of online betting markets in the United States.