New York has sued Polymarket, accusing the prediction market platform of operating an illegal gambling business while advertising its services across all 50 states. Attorney General Letitia James filed the lawsuit Thursday, marking the latest development in an expanding conflict between state regulators and federal authorities over jurisdiction of prediction markets.
"Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs," Attorney General James said in a statement. "By skirting New York's laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support."
Marketing Claims at Issue
The state's filing highlights Polymarket's marketing materials, which compared the platform to sportsbooks and advertised users could "trade every football game in all 50 states" ahead of launching its U.S. prediction market on December 3, 2025. The company subsequently promoted its platform as "legal in all 50 states," according to the complaint. New York disputes this characterization.
The state alleges Polymarket allowed users to place money on outcomes including whether the New York Mets would beat the Atlanta Braves, which contestant would finish second on "Big Brother," and which candidates would win gubernatorial elections. New York contends each contract represents a bet and that Polymarket operated without the required gambling license, specifically noting users aged 18 to 21 as particularly vulnerable.
Expanding Regulatory Conflict
Polymarket is not the only prediction market platform facing state-level action. Attorney General James previously sued rival Kalshi and filed similar petitions against Coinbase Financial Markets and Gemini Titan in April.
The enforcement actions highlight a jurisdictional dispute between the Commodity Futures Trading Commission, which asserts exclusive federal authority over prediction markets, and states attempting to regulate the same products under gambling laws. Federal appeals courts have already divided on the question of jurisdiction, leaving open the possibility of a potential U.S. Supreme Court decision.
