New York sues prediction market Polymarket, calling it an unlicensed gambling operation
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NEW YORK (AP) — New York sued the prediction market Polymarket on Thursday, arguing the platform is an unlicensed gambling operation and calling for a judge to block the company from operating in the state.
The lawsuit is the latest legal challenge from a state moving to rein in popular and now-ubiquitous betting apps that allow people to place wagers on most anything, including sports, weather, elections and technology.
Prediction market platforms have argued states do not have the authority to govern them because they are regulated at the federal level by the U.S. Commodity Futures Trading Commission.
New York officials filed Thursday’s lawsuit against Polymarket in state court and want the company to face fines and be forced to pay restitution to users because the platform did not get a gaming license from the state. The state has previously sued other platforms such as Kalshi, Coinbase and Gemini using a similar argument.
“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,” Gov. Kathy Hochul said in a statement.
In a statement, Polymarket’s Chief Legal Officer Neal Kumar said, “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.
Prediction market platforms have said they operate differently than traditional gambling operations, because consumers are trading against other consumers, similar to how stock markets work. They allow participants to buy and sell contracts tied to the probable outcome of an event. The platforms say prices are based on trading and they only take a fee from the trading.
The Commodity Futures Trading Commission, which has opposed state regulation of the platforms, did not immediately return a request for comment.
