New York has taken legal action to prevent prediction-market platform Polymarket from operating in the state, accusing it of running an illegal gambling business.
New York Attorney General Letitia James and Governor Kathy Hochul filed the lawsuit on Thursday, alleging that Polymarket had deliberately bypassed state gambling laws. The state is asking a court to order the company to stop doing business and advertising in New York unless it registers properly.
“By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support,” James said in a statement. “My office will never hesitate to take action to defend our laws and keep New Yorkers safe.”
Hochul said the platform’s activities posed a particular risk to people under the legal gambling age.
“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,” she said.
New York prosecutors argue that the contracts offered by Polymarket fall within the state’s legal definition of gambling. They say the company should therefore have obtained a licence from the New York State Gaming Commission.
The lawsuit also accuses Polymarket of avoiding taxes linked to regulated gambling operations. The New York Attorney General’s office said the money raised through those taxes helps fund public schools, sports programmes for underserved young people, and education and treatment for problem gambling.
The state is seeking a permanent order preventing Polymarket from operating in New York until it complies with registration requirements. It also wants the company to pay $100,000, along with other fines.
The case is the latest move by New York authorities in a wider dispute over how prediction markets should be regulated. In July, the state sued Kalshi over similar allegations.
Massachusetts and Rhode Island are among other states to have taken legal action against Kalshi and Polymarket. The cases form part of a broader national disagreement over whether prediction markets should primarily be governed by state authorities or the federal government.
Polymarket chief legal officer Neal Kumar said the company would continue operating in New York and had been working with state officials to address their concerns.
“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,” Kumar said. “We believe in New York and we’re staying here.”
