New York sues Polymarket over allegations of illegal gambling operations

New York State has filed a lawsuit against prediction market company Polymarket amid allegations that it violated state laws against illegal gambling.

The suit, filed on Thursday by New York State Attorney General Letitia James, comes two months after the state filed a similar lawsuit against competitor Kalshi. That followed the state suing Coinbase and Gemini for offering users the ability to bet on “sports, entertainment, and elections, in violation of New York laws”, according to a release from the attorney general’s office at the time.
The state accused all the companies of operating without licences from the State Gaming Commission.

“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 announcing the suit.

“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.”
The suit also alleges that the company encouraged gambling among young people. It accuses Polymarket of targeting users as young as 18, while state law requires users to be at least 21 years old to take part in mobile sports betting.

“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 Governor Kathy Hochul said in a statement.
The more than 30-page lawsuit claims that Polymarket, which is valued at more than $20bn, has advertised sports betting in particular since July 2025. It pointed to a post on X from August 17, 2025, about the launch of its US mobile app that said it was “BAD NEWS (For sportsbooks)”.

Prediction markets allow users to wager on so-called event contracts, covering political events, sports, elections and even award shows. Concerns about the role of prediction markets came to a head earlier this year when wagers were made in the hours before the United States and Israel first struck Iran, prompting widespread backlash in Washington.

Polymarket pushed back on the allegations.

“We chose to engage with them directly on the substance and address their concerns,” chief legal officer Neal Kumar said in a statement.