New York Sues Polymarket Over Illegal Gambling Operations

New York State has launched a legal attack on Polymarket, accusing the firm of running an illegal gambling operation. The state Attorney General Letitia James filed the suit this Thursday. This move follows a similar action taken just two months ago against rival prediction market Kalshi. In that earlier case, New York also sued Coinbase and Gemini for letting users wager on sports, entertainment, and elections in breach of local laws.

The complaint charges Polymarket with operating without a license from the State Gaming Commission. Attorney General Letitia James explained the intent behind these rules. "Our gambling laws exist to protect New Yorkers," she said. "They prevent the potential harms of problem gambling and ensure funding for educational and public benefit programs." She added that by ignoring state regulations, Polymarket targets vulnerable people and robs families of needed support. Her office will not hesitate to act to keep citizens safe.

The lawsuit further claims Polymarket encouraged gambling among minors. It says the company accepted bets from users as young as 18, even though New York law sets the age limit at 21 for mobile sports betting. Governor Kathy Hochul echoed these concerns in her own statement. "By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law," she said. "They have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming."

The document, which runs over 30 pages, notes that the company is valued at more than $20 billion. It alleges Polymarket ran sports betting ads starting in July 2025. The filing points to a specific post on X from August 17, 2025. That announcement marked the launch of its US mobile app and declared it was "BAD NEWS (For sportsbooks)". Prediction markets let people wager on event contracts covering politics, sports, elections, and even award shows. Worry about these platforms peaked earlier this year when bets were placed minutes before the United States and Israel struck Iran. That activity caused a major backlash in Washington.

Polymarket pushed back against the charges. Chief legal officer Neal Kumar said they wanted to talk directly with regulators. "We chose to engage with them directly on the substance and address their concerns," he stated. He claimed the agency preferred media attention instead of real conversation. When officials want to talk, our door is open for a discussion about how we protect consumers and offer fair, transparent and legal markets." The company did not respond to Al Jazeera's request for comment.

Kalshi faces identical accusations in New York State. That firm has criticized reports linking it to sports betting platforms. Just days before this lawsuit dropped, the Wall Street Journal reported that a wave of users linked stolen bank debit cards to Polymarket and drained the accounts immediately. When CEO Shayne Coplan learned of the issue, he reportedly told his team: "Just keep growing and pay a fine if regulators ever find out."

This legal battle is only the latest in a series of conflicts. New York's action joins a growing list of states suing prediction market platforms. Other states involved include Arizona, Massachusetts, Nevada, and many others.

Those states clash directly with Washington. The Commodity Futures Trading Commission says it holds authority over prediction markets. That federal agency believes its power extends there.

Polymarket maintains close ties to Donald Trump's family. This platform recently took investment from 1789 Capital. A venture capital firm runs that company. It is backed by Donald Trump Jr. He serves on the advisory board too.