Polymarket faces a lawsuit in New York with claims it’s operating an illegal gambling platform

New York has filed a lawsuit against the prediction market platform Polymarket, alleging that it operates an illegal gambling platform within the state. The lawsuit, filed in state court, calls for Polymarket to face fines, pay restitution to users, and be prevented from operating in New York. Governor Kathy Hochul stated that Polymarket's unlicensed operation poses risks, especially to underage individuals who may be vulnerable to problem gaming.

Polymarket's Chief Legal Officer, Neal Kumar, responded by pledging to defend the company and its users. The prediction market platform argues that it differs from traditional gambling, as participants trade against each other rather than against the house, with prices based on trading rather than fees. The Commodity Futures Trading Commission, which opposes state regulation of such platforms, has not yet commented on the lawsuit.