New York Attorney General Sues Polymarket Over Alleged Illegal Gambling

New York's attorney general, Letitia James, filed a petition against Polymarket on Thursday, alleging that the prediction market platform runs an illegal gambling operation. The move intensifies her broader campaign against the industry, which she contends breaches state prohibitions on gambling.

The case against Polymarket follows a similar petition James brought against its rival Kalshi roughly two months earlier. In April, she filed comparable petitions targeting two other prediction market operators, Coinbase Financial Markets and Gemini Titan.

Prediction markets have grown rapidly in popularity, particularly after outperforming pollsters in forecasting Republican Donald Trump's victory over Democrat Kamala Harris in the 2024 presidential election. The platforms are best known for allowing users to wager on the outcomes of sports events through so-called event contracts, though betting on elections and cultural events such as the Oscars is also common.

James's action is the latest in a series of efforts by US states to rein in the sector. Those states are simultaneously at odds with the Trump administration, as the Commodity Futures Trading Commission asserts it holds exclusive authority to regulate prediction markets.

Federal appeals courts have reached conflicting conclusions on which body should oversee the industry, raising the possibility that the US Supreme Court will ultimately have to settle the question.