TLDR
- New York Attorney General Letitia James sued Polymarket on Thursday, accusing it of running an illegal gambling business.
- The lawsuit says Polymarket’s event contracts are “quintessentially gambling” under state law.
- This follows similar lawsuits against Kalshi, Coinbase, and Gemini over the past several months.
- New York says Polymarket let 18 to 20 year olds trade despite a state minimum age of 21 for mobile betting.
- Polymarket says it wanted to talk directly with the state instead of facing a lawsuit.
New York’s attorney general has sued Polymarket. The lawsuit was filed Thursday in a Manhattan state court.
🚨BREAKING: New York SUES Polymarket over alleged illegal gambling operations, per Reuters.
New York Attorney General Letitia James says the platform violates state gambling laws, extending her crackdown on prediction markets after similar cases against Kalshi, Coinbase and… pic.twitter.com/WLsGuHR3cB
— Coin Bureau (@coinbureau) September 24, 2026
Attorney General Letitia James says Polymarket is running an unlicensed gambling operation. Her office argues the company’s prediction contracts are simply bets dressed up in different language.
This is not the first case of its kind. James filed a similar lawsuit against Kalshi in July. She also filed petitions against Coinbase Financial Markets and Gemini Titan back in April.
What The Lawsuit Claims
All four companies are accused of the same core issue. New York says they operated without getting a license from the state’s Gaming Commission.
The lawsuit also raises concerns about underage users. New York’s minimum age for mobile sports betting is 21, but Polymarket reportedly let users as young as 18 access its platform.
James called this a risk to public health. She said the company is exposing New Yorkers to gambling addiction with few protections in place.
New York Governor Kathy Hochul also weighed in. She said Polymarket knowingly broke state law and put residents at risk, especially younger users.
The state is asking for civil fines. It also wants Polymarket to give up any profits made illegally and pay back affected customers.
Polymarket’s Response
Polymarket said it was disappointed by the lawsuit. The company’s Chief Legal Officer, Neal Kumar, said it had tried to work with the state directly first.
Kumar said the company offered to discuss how it protects users. He added that state officials chose to sue instead of continuing that conversation.
Polymarket describes itself as the world’s largest prediction market. The company was founded in 2020.
It left the US market for more than three years. Polymarket relaunched in the country last December after getting approval from the Commodity Futures Trading Commission three months earlier.
The company also received investment from 1789 Capital last year. That firm is backed by Donald Trump Jr., who serves as a partner there and as an adviser to Polymarket.
New York estimates Polymarket’s business is worth more than 20 billion dollars.
A Bigger Legal Fight
This case is part of a larger disagreement between states and federal regulators. The CFTC has claimed it has sole authority to oversee prediction markets.
Federal appeals courts have not agreed on this question. Some legal experts think the US Supreme Court may eventually need to settle it.
Earlier this month, New Jersey asked the Supreme Court to review its own case against Kalshi. That request could lead to a ruling that applies across the industry.
The court has not said whether it will take up that case. For now, prediction market companies remain caught between conflicting state and federal rules.
Thursday’s filing cited specific examples from Polymarket’s app. One involved a bet on whether the Los Angeles Dodgers would beat the New York Mets by more than 1.5 runs in July. The Dodgers won 4 to 2.
New York’s filing suggests officials could seek to block New York residents from using the platform entirely.
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