New York sues Polymarket over alleged illegal gambling business

New York Attorney General Letitia James is taking Polymarket to court over its sporting event contracts, arguing that the platform’s prediction markets are gambling under state law. For high-risk payments players, the important bit is not the rhetoric: if a state treats event contracts as wagering, the platform, its advertising, and potentially its payment flows all become part of the dispute.

1. On Thursday, New York state officials filed a lawsuit against Polymarket, alleging that its prediction market event contracts violate state gambling laws. The filing specifically targets contracts related to sporting events.
2. The lawsuit follows a similar action against Kalshi in July and litigation in April against prediction market platforms run by Coinbase and Gemini. That puts Polymarket into the same regulatory bucket as other US-facing prediction markets now facing state-level scrutiny.
3. The filing says New York officials could also seek to block the platform from residents. It also points to Polymarket’s advertising practices to New Yorkers and to sporting event contracts on its mobile app, which launched in December 2025.
4. In the filing, state officials argued that Polymarket is trying to avoid “the legal and financial consequences” of New York’s gambling rules by relabeling wagering as “event contracts” on a “prediction market.”
5. The case is part of a wider jurisdiction fight in the US over who gets to regulate prediction markets. US Commodity Futures Trading Commission Chair Michael Selig has said the federal agency has “exclusive jurisdiction” over the companies, while New Jersey officials earlier this month asked the US Supreme Court to hear its case against Kalshi. The court has not said whether it will take up the issue.