New York Pulls Polymarket Into Legal Battle With $4.6B Suit

New York has launched a legal battle against prediction-market platform Polymarket, demanding at least $4.6 billion in damages. The state claims Polymarket has been engaging in unlicensed gambling "in flagrant disregard" of New York's laws. The lawsuit was filed in New York State court, but Polymarket has moved it to federal court to fight the case in a more favorable jurisdiction.

The lawsuit includes eight causes of action, such as violations of the New York State Constitution and the Federal Interstate Wire Act. New York is seeking a ruling that Polymarket must forfeit all illegal gains, compensate consumers harmed, and pay fines amounting to three times the gains made through illegal actions. The suit specifically targets Polymarket's policy of allowing users as young as 18 to place bets, as New York law mandates a minimum age of 21 for gambling.

Attorney General Letitia James emphasized that New York's gambling laws aim to protect residents, prevent problems associated with gambling, and ensure funding for educational and public benefit programs. Polymarket's Chief Legal Officer, Neal Kumar, acknowledged the company's growth and expressed determination to fight the lawsuit.

New York has also filed similar lawsuits against Kalshi and crypto exchanges Coinbase and Gemini for their prediction-market offerings. These cases are part of a larger wave of legal actions involving prediction-market companies, totaling over 20 lawsuits, including those brought by state AGs and consumer groups, as well as Native American tribes.