New York Files Lawsuit Against Polymarket U.S.

New York State initiated legal proceedings against Polymarket U.S. on Thursday, marking the second lawsuit filed against a prediction market platform in less than two months. This action follows the state’s July suit against rival platform Kalshi.

State Attorney General Letitia James accused Polymarket of operating an unlicensed gambling enterprise that violates New York state laws. In a statement, James emphasized the potential harm to residents, stating, “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support.”

The complaint asserts that Polymarket U.S. lacks a license from the New York State Gaming Commission and allows participation from individuals over the age of 18. The lawsuit also referenced a report by the state’s Office of Addiction Services and Supports, which identifies users aged 18 to 24 as being at “high-risk” for gambling addictions.

Governor Kathy Hochul supported the legal action, warning that the unlicensed operation poses significant risks to New Yorkers. “By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming,” Hochul said.

Penalties sought in the lawsuit include triple the amount of any profits gained by Polymarket and a fine of $100,000 for each instance of offering sports wagering or mobile sports wagering within the state. Additionally, the state is demanding a full accounting of all trades executed on the platform, user losses, and the company’s earnings.

Polymarket U.S. launched its domestic operations in December 2025 and operates under the regulation of the Commodity Futures Trading Commission (CFTC), the federal agency overseeing prediction markets. The company also maintains an offshore platform established in 2020. As of now, the CFTC has not responded to requests for comment regarding the lawsuit.

This legal battle represents the latest escalation in the ongoing regulatory conflict between individual states and prediction market platforms. The CFTC has previously counter-sued multiple states, asserting its federal authority to regulate these markets.

In response to the New York suit, Neal Kumar, chief legal officer for Polymarket, defended the company’s presence in the state. “Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here, embodying why people and businesses come here to make it. We believe in New York and we’re staying here. While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users,” Kumar said.