Polymarket sued by New York over alleged illegal gambling
New York's attorney general sued Polymarket for allegedly operating prediction markets without a state gambling license, exposing customers to harm.Summary
New York Attorney General Letitia James filed a petition on September 24 in a Manhattan state court against Polymarket, alleging that the prediction market platform offered contracts tied to future event outcomes to New York residents without obtaining a license from the New York State Gaming Commission. The state is seeking to halt the unlicensed operation, obtain customer restitution, impose civil fines, and require Polymarket to forfeit gains earned illegally. The petition specifically cites sports contracts, including a July baseball game between the Los Angeles Dodgers and New York Mets. State officials also object to Polymarket allowing users aged 18 to 20 on its platform, noting that New York sets a minimum age of 21 for mobile sports betting. Governor Kathy Hochul and Attorney General James both argued that unlicensed operations expose residents, especially younger users, to problem gambling without the protections required of state-regulated operators. Polymarket expressed disappointment and said it would engage with the state.
James has filed similar cases against Kalshi (July), Coinbase Financial Markets, and Gemini Titan (April), all alleging those companies offered gambling products without required state licenses. Separately, in August, the New York City Council examined prediction market advertising by Polymarket, Kalshi, Coinbase, and Gemini Titan, focusing on allegations of deceptive marketing.
The case reflects a broader jurisdictional dispute over whether federal oversight of event contracts under the Commodity Futures Trading Commission (CFTC) prevents states from applying their gambling laws. Federal appeals courts have split: the Third Circuit in April upheld blocking New Jersey from enforcing its gambling rules against Kalshi's sports contracts, while the Ninth Circuit in August allowed Nevada gaming regulators to proceed. New Jersey has petitioned the Supreme Court to review the split.
(Source：Crypto News)