South Carolina Lawyer Sues Polymarket and DraftKings Predictions Over Illegal Gambling Claims

A South Carolina attorney has filed a complaint against Polymarket and DraftKings Predictions, arguing that their prediction markets amount to gambling and were offered without formal authorization. For high-risk operators, the point is not the label on the product page; it is whether state law treats the contract as a wager.

1. Jame M. Hughes of Motley Rice filed the complaint last week in South Carolina. The suit says Polymarket and DraftKings Predictions breached local gambling laws by offering games of chance without authorization.
2. The complaint argues that the companies are taking illegal wagers from state residents on sporting event outcomes and collecting winnings from those bets. Hughes said, “This lawsuit is premised on a straightforward thesis: The rhetorical set dressing of ‘prediction markets’ and event contracts doesn’t change reality.”
3. The case is part of a broader push against prediction markets. The text says the sector has faced growing pressure in places including Washington, Michigan, and New York, where regulators and state officials have been treating these products as gambling rather than financial-style contracts.
4. Hughes also claims the products add fuel to a problem gambling epidemic and can drive people to desperate lengths. He argues the harm is not limited to at-risk or problem gamblers, and that even people who do not gamble compulsively can face serious financial consequences.
5. New York has separately announced a lawsuit against Kalshi, another prediction market company, alleging illegal gambling. The state’s AG and the governor’s office are seeking $36 billion back from the company, framed as illegal proceeds plus restitution to customers.

For PSPs, acquiring banks, and platforms sitting anywhere near prediction markets, this is the practical issue: if a state regulator decides the product is gambling, the contractual wrapper will not do much work for you in court.