New York attorney general sues Polymarket over alleged illegal sports betting

New York Attorney General Letitia James and Governor Kathy Hochul have sued Polymarket, accusing the prediction-market operator of running an unlicensed gambling business in the state. For high-risk payment providers, the point is simple: when a product sits on the line between event contracts and gambling, the licensing and acquiring risk does not stay theoretical for long.

1. The lawsuit, announced on September 24, seeks to stop Polymarket from operating in New York. The state says Polymarket’s contracts meet New York’s legal definition of gambling because users wager money on uncertain outcomes outside their control or dependent on chance.
2. According to the complaint, Polymarket has not obtained a licence from the New York State Gaming Commission and does not meet the requirements imposed on licensed gambling operators. New York is also seeking a court order, fines, forfeiture of Polymarket’s gains, and restitution for users.
3. The state alleges that Polymarket allowed people aged 18 to 20 to participate, while New York requires customers to be at least 21 to place mobile sports wagers. The complaint also says Polymarket marketed itself as a sports-betting platform for over a year, citing an August 2025 promotional post on X.
4. Polymarket has denied the allegations and said it will defend its users and platform. Chief Legal Officer Neal Kumar said James’s office was repeating arguments used in its legal action against Kalshi, which commenced in July.
5. This is the second major prediction-market company James’s office has targeted, after the separate lawsuit against Kalshi. The broader fight is also playing out at the federal level: the Commodity Futures Trading Commission says federally regulated event contracts fall within its jurisdiction, while states argue that some event contracts are essentially gambling and therefore subject to state law. The CFTC sued New York in April, seeking a ruling that federal law preempts the state’s gambling restrictions in this area.