New York Attorney General Letitia James has sued prediction market platform Polymarket, alleging that sports-related event contracts offered through the company violate state gambling law. The lawsuit was filed on Thursday and focuses on contracts available on Polymarket’s mobile app, which launched in December 2025, as well as marketing directed at New York residents.
The case adds Polymarket to a growing list of prediction market operators facing legal pressure from states. It also deepens an ongoing dispute over whether these products should be overseen by state gambling regulators or by the US Commodity Futures Trading Commission.
State targets sports contracts and advertising
According to the filing, New York officials argue that Polymarket is offering what the state considers gambling activity while presenting it as event-contract trading on a prediction market. The complaint centers on sports event contracts available through the company’s app and on promotional activity aimed at people in New York.
The lawsuit says the state may also seek to block residents’ access to the platform. In the filing, officials accused Polymarket of trying to avoid New York’s gambling rules and related financial consequences by framing wagering as prediction-market activity.
Part of a broader enforcement push
The lawsuit follows other state actions against prediction market businesses. In July, New York brought a similar case against Kalshi. In April, the state also pursued litigation involving prediction market platforms operated by Coinbase and Gemini.
Taken together, those cases show that state authorities are increasingly willing to challenge how these markets are structured and marketed, particularly when the contracts involve outcomes that officials believe fall within existing gambling laws.
Jurisdiction remains unsettled
The Polymarket case arrives amid a wider conflict between state governments and federal regulators over who has authority over prediction markets. CFTC Chair Michael Selig has said the federal agency has exclusive jurisdiction over these companies, a position that clashes with state-level enforcement efforts.
That disagreement has yet to be resolved in court. Earlier this month, New Jersey officials asked the US Supreme Court to hear arguments in their case against Kalshi, seeking a ruling that could help clarify which regulator should oversee the industry. The Supreme Court has not said whether it will take up the matter.
What comes next
For now, the immediate issue is New York’s claim that Polymarket’s sports contracts and related advertising ran afoul of state law. The lawsuit could become another test case in the larger debate over whether prediction markets should be treated as gambling products at the state level or as federally supervised event contracts.
Any broader answer may depend on future court rulings, including whether the Supreme Court agrees to hear the New Jersey-Kalshi dispute. Until then, the legal boundaries for prediction market platforms in the United States remain contested.
Source: cointelegraph.com