New York Sues Polymarket, Cites Illegal Gambling Operation

New York has filed a lawsuit against Polymarket, alleging the company operates an illegal gambling platform that circumvents state regulations. The suit, brought by Attorney General Letitia James, marks the latest legal challenge against prediction markets.

According to the complaint, Polymarket allows users to bet on a wide range of outcomes, including political events, sports, and pop culture. The state argues that these operations function as a loophole to avoid the regulations and taxes associated with licensed gambling entities.

"Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs," James stated in a press release. "By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support."

The lawsuit seeks to compel Polymarket to forfeit any profits gained through its alleged illicit activities, pay restitution to affected parties, and incur fines equivalent to three times its profits. Governor Kathy Hochul has expressed support for the legal action.

This action follows a similar lawsuit filed by New York against prediction market Kalshi approximately two months prior, indicating a broader regulatory scrutiny of such platforms within the state.