New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against Polymarket on Thursday, accusing the crypto-based prediction market of operating as an unlicensed gambling business in violation of state law.
The lawsuit marks the latest enforcement action from James’s office targeting prediction market platforms. In July 2026, James and Hochul sued Kalshi, a rival prediction market. In April 2026, James sued Coinbase and Gemini over similar claims related to their crypto trading operations.
An investigation by the Attorney General’s office concluded that prediction markets meet New York’s legal definition of gambling because users stake money on uncertain outcomes they cannot control. Polymarket never obtained a license from the New York State Gaming Commission, according to the complaint.
“By skirting New York’s laws, Polymarket is targeting the most vulnerable,” James said in a statement.
Licensed casinos and mobile sportsbooks in New York pay taxes that fund public schools, youth sports programs, and problem gambling treatment. Polymarket operates without contributing to these revenue streams, the lawsuit alleges.
Age Requirements and Regulatory Conflict
Polymarket is open to users aged 18 to 20. New York requires mobile sports bettors to be at least 21, creating a compliance gap under state law.
Polymarket and Kalshi argue they operate as federally regulated exchanges offering “event contracts,” a type of derivative, under Commodity Futures Trading Commission jurisdiction rather than state gaming laws. The CFTC agrees with the platforms and has joined the fight on their side. In 2026, the CFTC sued nine states, arguing it should have exclusive nationwide authority over the industry.
Polymarket launched in the United States in December 2025 and initially allowed users to bet on sporting events with plans to expand into markets on a wide range of topics.
Recent Enforcement Pattern
Earlier this month, James secured $8 million from a sweepstakes casino operator in a separate enforcement action. The prediction market lawsuits represent an intensifying focus by New York state officials on cryptocurrency and gambling-adjacent businesses operating within the state.
The outcome of the Polymarket case will test whether New York’s gaming authority or federal CFTC oversight prevails in regulating prediction markets. The CFTC’s active defense of the platforms suggests a prolonged jurisdictional dispute.
