New York Sues Polymarket, Calling Prediction Market an Illegal Gambling Operation

According to Bitcoin Magazine, New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against the prediction market Polymarket. The complaint alleges that the platform operates as an unlicensed gambling operation in the state without obtaining a license from the New York State Gaming Commission, thereby avoiding taxes that fund public schools, youth sports programs, and problem gambling treatment.

The lawsuit states that Polymarket's markets meet New York's legal definition of gambling because users stake money on uncertain outcomes outside their control. Additionally, the complaint asserts the platform is accessible to users aged 18 to 20, whereas New York requires mobile sports bettors to be at least 21 years old.

Reporting by Bitcoin Magazine notes that Polymarket and rival Kalshi contend they operate as federally regulated exchanges offering event contracts, placing them under the Commodity Futures Trading Commission rather than state gaming laws. The CFTC joined the dispute, having sued nine states in 2026 to assert exclusive nationwide authority over the industry. New York is asking a court to bar Polymarket from operating without a license, require the forfeiture of illegal gains, repay harmed users, and pay fines equal to three times those gains.