New York Attorney General Letitia James sued prediction market operator Polymarket on Thursday, alleging that the company violated state gambling laws by operating without a license from the New York State Gaming Commission.
The action escalates the state’s campaign against prediction markets, following similar cases against Kalshi, Coinbase Financial Markets and Gemini Titan.
New York is seeking civil fines, forfeiture of allegedly illegal gains and full restitution for customers.
The lawsuit alleges Polymarket encouraged problem gambling and allowed users ages 18 to 20 to access its platform even though New York requires participants in mobile sports betting to be at least 21.
Governor Kathy Hochul said the alleged unlicensed operation put New Yorkers at risk, particularly underage users considered vulnerable to problem gaming.
The more than 30-page filing also points to Polymarket’s advertising of sports-related markets since July 2025, including promotion of its US mobile app.
Prediction markets let users wager through event contracts on outcomes involving sports, elections, politics and cultural events.
James argues such contracts constitute gambling because users wager on outcomes they do not control and receive payouts when their predictions succeed.
New York said Polymarket’s business has reportedly been valued at more than $20 billion.
Polymarket disputed the state’s approach, saying it had sought to engage officials directly over their concerns.
Chief Legal Officer Neal Kumar said the company remains open to discussing consumer protections and what it describes as fair, transparent and legal markets.
The case adds to lawsuits brought by states including Arizona, Massachusetts and Nevada as state regulators clash with the Commodity Futures Trading Commission over authority to oversee prediction markets.
Federal appeals courts are divided over who should regulate the industry, adding another dimension to the dispute over state and federal oversight.
Polymarket returned to the US market last December after receiving a CFTC green light three months earlier.
The lawsuit places the company alongside other prediction market operators facing challenges from New York over whether their event contracts amount to gambling subject to state licensing requirements.