New York sues Polymarket for 'illegal gambling operation'

New York Attorney General Letitia James has filed a lawsuit against Polymarket, intensifying her efforts to challenge prediction-market platforms that she claims violate New York's laws prohibiting illegal gambling. Polymarket, valued at over $20 billion, pushed back against New York's legal action, as reported by Reuters. James submitted the petition in a Manhattan state court, following similar legal actions against rival Kalshi and Coinbase Financial Markets.

The lawsuit alleges that Polymarket operates unlicensed gambling markets, exposing New Yorkers to gambling addiction with minimal safeguards. The state also expressed concerns over Polymarket allowing users aged 18 to 20 to access its platform, despite the minimum age for mobile sports betting in New York being 21. New York Governor Kathy Hochul expressed concern about the company's operation of gambling markets without state supervision, stating that Polymarket has knowingly violated state law and put New Yorkers at risk, particularly those underage who are most vulnerable to problem gaming.

Polymarket Chief Legal Officer Neal Kumar stated that the company sought to address New York officials' concerns directly but claims they chose to pursue the matter publicly. Kumar added that they remain open to conversations about protecting consumers and offering fair, transparent, and legal markets. The lawsuit marks the latest move by US states to tighten oversight of prediction markets, an industry that has gained popularity due to its success in forecasting election outcomes.