New York files lawsuit against Polymarket, calling it an illegal gambling operation

New York files lawsuit against Polymarket, calling it an illegal gambling operation ‘Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here,’ Polymarket’s chief legal officer said - Bookmark Become an Independent member to bookmark this article Already a member? Log in State authorities in New York filed a lawsuit against Polymarket on Thursday, alleging that the prediction platform functions as an illegal gambling business and asking a judge to halt its operations. The action marks the latest attempt by a state to exert control over increasingly widespread wagering applications, which permit users to stake money on everything from sporting outcomes and weather to technology and elections. For their part, prediction market firms maintain that state oversight is preempted by federal jurisdiction, asserting that primary regulation falls under the U.S. Commodity Futures Trading Commission. Brought in state court, New York's suit requests financial penalties against Polymarket alongside restitution for consumers, citing the company's failure to obtain a state gaming license. Similar legal action has previously been targeted by state officials against other prominent trading platforms, including Kalshi, Coinbase and Gemini, using comparable arguments. "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," Gov. Kathy Hochul said in a statement. In a statement, Polymarket’s Chief Legal Officer Neal Kumar said, "We'll fight for our users." "Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here, embodying why people and businesses come here to make it. We believe in New York and we’re staying here," Kumar said. Operators of prediction platforms insist their business model is distinct from standard betting, describing it as peer-to-peer trading akin to a stock exchange. Under this structure, users purchase and sell contracts based on the likelihood of future developments, with market prices determined entirely through trading activity while the platform generates revenue strictly through transaction fees. The Commodity Futures Trading Commission, which has resisted state-level attempts to regulate these platforms, did not immediately respond to a comment request.