New York Wants to Ban Polymarket, Lawsuit Calls It 'Illegal Gambling Operation'

New York state attorneys general Letitia James has filed a lawsuit against Polymarket, accusing the company of operating an unlawful gambling business. This legal action follows a similar lawsuit against prediction market Kalshi just over a month ago. James' office will seek a court order to halt Polymarket's operations, requiring the company to pay fines and surrender any illegal profits.

Governor Kathy Hochul stated that Polymarket's unlicensed gambling activities have put New Yorkers at risk, particularly underage individuals susceptible to problem gaming. Polymarket's chief legal counsel, Neal Kumar, responded by defending the company's operations, emphasizing their growth and commitment to New York. The company claims it is a financial services platform rather than a gambling service, a position that has been challenged by recent developments, including a CFTC investigation into Polymarket for potential fraud.

Despite the legal dispute, the White House has shown little interest in federal oversight of prediction markets, with the Trump family having direct ties to both Kalshi and Polymarket. As states grapple with the potential rise in gambling addiction, more are considering regulatory measures, despite the federal government's stance that the CFTC should be the sole regulator of these businesses.