New York’s Attorney General Letitia James filed a lawsuit on Thursday against Polymarket, accusing the prediction market platform of operating an illegal gambling business that circumvents state regulations. This legal action marks the latest effort by New York officials to challenge the rapidly growing prediction market industry, following a similar lawsuit filed against Kalshi nearly two months ago.
The lawsuits contend that platforms like Polymarket and Kalshi offer users the ability to wager on a wide range of outcomes, including sports events, entertainment, and political developments, without adhering to licensing and tax requirements imposed on traditional gambling operators. James argued that New York’s gambling laws are designed to safeguard the public by mitigating problem gambling risks and funding educational and public benefit programs.
“By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support,” James said in a statement.
The initial lawsuit against Kalshi in July, without action against Polymarket at that time, drew attention within the industry and regulatory circles. James’ office declined to comment on the timing of the current suit against Polymarket.
Polymarket rejected the allegations, with Chief Legal Officer Neal Kumar characterizing the lawsuit as repetitive and driven by a desire for publicity. “While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users,” Kumar said Thursday, adding that the attorney general chose “a media hit” instead of engaging directly with the company.
The broader fight over prediction markets’ regulatory status has drawn involvement from numerous stakeholders, including a coalition of 44 state attorneys general, Native American tribes, and members of the casino industry. These groups have sought to have the Commodity Futures Trading Commission oversee the industry rather than state gambling commissions, which typically have stricter regulatory frameworks.
Polymarket maintains a data-sharing partnership with Dow Jones, a subsidiary of News Corp, the parent company of the publication reporting the lawsuit. The outcome of these legal challenges will likely influence how prediction markets operate and are regulated in the United States going forward.