New York sues Polymarket U.S. as ‘illegal gambling business’
New York sued Polymarket U.S. for running an illegal gambling business, while Polymarket countersued alleging federal jurisdiction.Summary
New York Attorney General Letitia James filed a lawsuit against Polymarket U.S., accusing the prediction market platform of operating an illegal gambling business in the state. The suit seeks a court order blocking Polymarket from operating without a license, along with fines, forfeiture of illegal gains, and restitution to users. Governor Kathy Hochul stated that Polymarket knowingly violated state law and put New Yorkers at risk, particularly minors vulnerable to problem gaming. The case is part of a broader jurisdictional dispute: the U.S. Commodity Futures Trading Commission (CFTC) treats prediction markets as federally regulated derivatives exchanges, while many states argue their gaming laws apply. The U.S. Supreme Court was recently asked to weigh in on this conflict. Hours after New York's lawsuit, Polymarket filed its own suit against the state, claiming the state has no authority to act because the company's U.S. operations are overseen by the CFTC, calling New York's action "an extraordinary assertion of state power squarely foreclosed by federal law." New York had previously sued Polymarket's main competitor, Kalshi Inc. Prediction markets have surged in popularity since President Donald Trump returned to the White House, with the CFTC embracing the industry under Chairman Michael Selig.
(Source：Financial Post)