NY Attorney General Sues Polymarket, Calling Its Prediction Markets Illegal Unlicensed Gambling
New York's Attorney General sued Polymarket for operating unlicensed gambling through prediction markets, with the company filing a countersuit.Summary
New York Attorney General Letitia James, alongside Governor Kathy Hochul, filed a lawsuit against QCX LLC, which operates as Polymarket US, accusing the prediction-market platform of running an illegal and unlicensed gambling business in the state. The Attorney General's Office concluded that Polymarket's contracts meet New York's legal definition of gambling because users wager on uncertain events outside their control. Officials also highlighted that the platform was available to users aged 18–20, while New York requires participants in mobile sports betting to be at least 21. The state is seeking a court order to halt Polymarket's operations, along with fines, forfeiture of alleged illegal gains, and restitution for affected customers.
Polymarket has disputed New York's position and filed its own countersuit, arguing that prediction markets fall under federal oversight by the Commodity Futures Trading Commission rather than state gambling regulation. Chief Legal Officer Neal Kumar stated that the company had attempted to engage with officials and intends to defend its platform and users. This raises a central legal question: whether prediction markets should be regulated as financial markets under federal law or treated as gambling under state law. The case is part of a broader trend, as New York has also sued Kalshi and taken action against Coinbase and Gemini over their prediction-market platforms, creating a nationwide regulatory battle over how event contracts should be classified. The outcome could significantly impact the future of prediction markets across the country.
(Source：International Business Times)