New York Sues Prediction Market Polymarket Over Unlicensed Gambling Claims
New York sues Polymarket, alleging it operates as an unlicensed gambling platform.
2 min read
New York has filed a lawsuit against the prediction market Polymarket, accusing the platform of operating as an unlicensed gambling business and demanding a court block its operations in the state. The lawsuit marks another effort by New York to regulate popular betting apps that allow users to wager on a wide range of topics, including sports, weather, elections, and technology.
Legal Challenge Amid Rising Concerns
The lawsuit, filed in state court on Thursday, argues that Polymarket failed to secure a gaming license from New York, putting residents at risk, particularly minors who are vulnerable to problem gambling. The state has previously taken similar legal actions against other platforms like Kalshi, Coinbase, and Gemini.
“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,” said Governor Kathy Hochul in a statement.
Polymarket’s Response and Business Model
In response, Polymarket’s Chief Legal Officer, Neal Kumar, stated the company would fight the lawsuit. “We’ll fight for our users,” Kumar said, adding, “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.”
Polymarket and similar platforms argue they operate differently from traditional gambling, as users trade against each other rather than against a house. They describe their model as akin to stock markets, where participants buy and sell contracts tied to the likely outcomes of events, with platforms taking only a fee from trading activities.
Federal Regulation and Legal Debate
Despite these arguments, New York officials assert that the platforms fall under state jurisdiction, not federal oversight by the U.S. Commodity Futures Trading Commission. The CFTC has previously opposed state regulation of prediction markets, claiming they are federally regulated.
The Commodity Futures Trading Commission, which has opposed state regulation of the platforms, did not immediately return a request for comment.
Source: OANN
