Just over a month after suing prediction market Kalshi for running an “illegal gambling” operation, New York state authorities are now accusing competitor Polymarket of exactly the same thing.
On Thursday, the state’s attorney general Letitia James filed a lawsuit against Polymarket, accusing it of violating state laws against illegal gambling, as Reuters reports.
James’ office will seek a court order to block the company from operating as an unlicensed gambling business, which would require it to pay fines and forfeit any illegal gains.
“By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law,” said New York governor Kathy Hochul in a statement, adding that “they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming.”
Polymarket’s chief legal council Neal Kumar fired back in a strongly-worded statement.
“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,” he said. “We believe in New York and we’re staying here. While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users. We didn’t run to preemptively sue the state — we chose to engage with them directly on the substance and address their concerns. They preferred the media hit. Any time the AG’s office wants to swing by, our door is open for a conversation about how we protect consumers and offer fair, transparent and legal markets.”
The White House has expressed little interest in federal regulations reining in prediction markets. In fact, president Donald Trump’s family has direct ties to both Kalshi and Polymarket.
And without oversight from Washington, DC, an increasing number of states are looking to take action as experts fear a wave of gambling addiction, facilitated by a surge in interest for betting on platforms like Kalshi and Polymarket.
The Trump administration maintains that the Commodity Futures Trading Commission should be the only group regulating these companies, putting it at odds with those states, per Reuters.
Earlier this week, news broke that the CFTC is investigating Polymarket after finding that fraudsters tried to steal at least $10 million from the platform.
Polymarket continues to argue that it’s not a gambling service, even though it neatly fits into the very definition of gambling. It has maintained that it’s a financial services group, which wouldn’t make it subject to gambling laws.
But given the latest news, not everyone in US politics is convinced of that argument.
More on prediction markets: Prediction Markets Are Sucking Huge Numbers of Young People Into Gambling
The post New York Sues Polymarket, Accuses It of Running an “Illegal Gambling” Operation appeared first on Futurism.
