New York Goes After Polymarket Again: Prediction Market Regulatory Battle Spreads to Four Firms

Four lawsuits in four months—New York state is calling out prediction market operators one by one and dragging them into court. The latest name on the list: Polymarket.

New York Attorney General Letitia James and Governor Kathy Hochul jointly announced a lawsuit against Polymarket's US arm. According to the AG's office, the two are seeking a court order to "stop Polymarket from operating as an unauthorized gambling business within New York State."

This isn't James's first move. She already filed a similar lawsuit against Kalshi this past July, and went after Coinbase Financial Markets and Gemini Titan back in April. Counting Polymarket, New York now has four active lawsuits against prediction market platforms, all built around the same core allegation: these platforms are essentially running unregulated gambling operations. Some of the suits, including this latest one against Polymarket, go a step further and accuse the platforms of letting minors place bets—most prediction market platforms only require users to be 18, while sports betting in most US states requires bettors to be 21.

New York isn't the only state trying to fold prediction markets into gambling regulations, but what's really complicating this fight is federal intervention. The Commodity Futures Trading Commission (CFTC) has turned around and sued several states, arguing that it alone has regulatory authority over prediction markets and that state-level legal actions overstep their jurisdiction.

The courts are currently split. A panel from the Third Circuit Court of Appeals issued the first ruling on the matter, siding with the federal CFTC over New Jersey. But just last month, the Ninth Circuit Court of Appeals sided with Nevada, rejecting Kalshi's bid to block the state from regulating its operations. With one ruling favoring federal oversight and another upholding state authority, which way Polymarket's case will go remains an open question.