New York sues Polymarket as prediction-market regulation fight widens

New York has sued Polymarket alleging that the prediction-market operator is an unlicensed gambling business and asking a state court to stop it operating in New York.

The state’s case says contracts tied to uncertain events constitute gambling under New York law and that Polymarket lacks a state gaming licence. It also alleges people aged 18 to 20 can access the markets despite the state’s minimum age of 21 for mobile sports betting.

New York is seeking an injunction, restitution, forfeiture and fines. Polymarket says users trade contracts with one another and it earns transaction fees, and argues that the products are federally regulated derivatives rather than conventional bets.

Polymarket has filed a separate federal action, arguing Congress has prevented states from applying gambling laws to federally regulated derivatives exchanges. The Commodity Futures Trading Commission also sued New York in April, claiming exclusive federal jurisdiction over event contracts.

Polymarket’s chief legal officer Neal Kumar said in a statement: “We’ll fight for our users.”

“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.