New York officials filed a lawsuit against the prediction market platform Polymarket on Thursday, asserting the service functions as an “unlicensed gambling operation,” the Associated Press reports. The state is asking a judge to block the company from continuing its operations within New York borders.
This legal move marks the latest attempt by the state to exert control over popular betting applications that let people wager on a wide variety of topics, including sports, weather, technology, and political elections. The state is pushing for Polymarket to pay significant fines and provide restitution to users.
The primary argument from New York is that the platform failed to obtain a necessary gaming license to operate legally. This is not the first time the state has taken such a stance, as it previously initiated lawsuits against other platforms like Kalshi, Coinbase, and Gemini using similar legal reasoning.
Gov. Kathy Hochul addressed the situation in a formal statement
“By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming,” Gov. Kathy Hochul said.
Polymarket is pushing back against these claims. In a statement, the company’s Chief Legal Officer Neal Kumar made their stance very clear. “We’ll fight for our users,” Kumar said. He also emphasized the company’s local roots and commitment to the city. “Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here, embodying why people and businesses come here to make it. We believe in New York and we’re staying here,” Kumar said.
At the heart of the disagreement is how these platforms define their own business models. Prediction markets consistently argue that they operate differently from traditional gambling sites. They maintain that their systems are more akin to stock markets, where consumers trade against other consumers.
On these platforms, participants buy and sell contracts that are tied to the probable outcome of specific events. Because these prices are determined by trading activity and the company only collects a fee from those trades, the platforms argue they should not be classified as standard betting operations.
This conflict also highlights a tension between state and federal oversight. Prediction market platforms have argued that individual states lack the authority to govern them because they are already regulated at the federal level by the U.S. Commodity Futures Trading Commission. The commission has previously opposed state efforts to regulate these platforms.
As of Thursday, the U.S. Commodity Futures Trading Commission had not returned a request for comment regarding the lawsuit.
Published: Sep 24, 2026 05:42 pm