New York Attorney General Files Lawsuit Against Polymarket Over Unlicensed Gambling Operations

TLDR

• Attorney General Letitia James filed a complaint against Polymarket on Thursday, alleging the platform operates as an unlicensed gambling enterprise.
• According to the complaint, Polymarket’s prediction contracts constitute gambling activity under New York state regulations.
• The legal action mirrors previous enforcement actions taken against Kalshi, Coinbase, and Gemini in recent months.
• State officials claim Polymarket allowed users aged 18 to 20 to participate, violating New York’s 21-year minimum age requirement for mobile wagering.
• The company expressed disappointment, stating it attempted direct engagement with regulators before litigation commenced.

The New York Attorney General’s office has initiated legal proceedings against Polymarket. The complaint was submitted Thursday to a Manhattan state courthouse.

BREAKING: New York SUES Polymarket over alleged illegal gambling operations, per Reuters.

New York Attorney General Letitia James says the platform violates state gambling laws, extending her crackdown on prediction markets after similar cases against Kalshi, Coinbase and… pic.twitter.com/WLsGuHR3cB

— Coin Bureau (@coinbureau) September 24, 2026

Letitia James contends that Polymarket functions as an unauthorized gambling enterprise. Her legal team maintains that the platform’s prediction contracts represent wagering activities under a different guise.

The enforcement action represents part of a broader pattern. James initiated comparable litigation against Kalshi during July. Additionally, her office submitted legal petitions targeting Coinbase Financial Markets and Gemini Titan in April.

Key Allegations in the Complaint

Each of the four entities faces identical fundamental accusations. State prosecutors assert they conducted operations without obtaining authorization from New York’s Gaming Commission.

The complaint additionally highlights age verification concerns. While New York mandates a 21-year minimum for mobile sports wagering, Polymarket allegedly permitted 18-year-old individuals to utilize its services.

James characterized this as a public health concern. She stated the platform exposes state residents to gambling dependency with inadequate safeguards.

Governor Kathy Hochul issued a statement supporting the action. She asserted that Polymarket deliberately violated state regulations and endangered citizens, particularly younger demographics.

State prosecutors seek monetary penalties. The complaint requests Polymarket surrender illegally obtained revenues and provide restitution to impacted users.

Company’s Statement

Polymarket expressed regret regarding the litigation. Neal Kumar, the platform’s Chief Legal Officer, indicated the company pursued direct dialogue with state authorities initially.

Kumar stated the organization proposed discussions regarding user protection measures. He noted that government officials elected to pursue litigation rather than maintain negotiations.

Polymarket positions itself as the premier global prediction marketplace. The platform launched operations in 2020.

Following a withdrawal from American markets spanning over three years, Polymarket resumed domestic operations last December. This followed regulatory clearance from the Commodity Futures Trading Commission obtained three months prior.

The platform additionally secured funding from 1789 Capital during the previous year. The investment firm counts Donald Trump Jr. among its backers, who holds positions as both partner and Polymarket adviser.

State officials estimate Polymarket’s valuation exceeds 20 billion dollars.

Broader Regulatory Conflict

This litigation exemplifies escalating tensions between state governments and federal oversight bodies. The CFTC maintains it possesses exclusive jurisdiction over prediction market regulation.

Federal appellate tribunals have issued divergent opinions on this jurisdictional question. Legal scholars anticipate the Supreme Court may ultimately resolve the dispute.

New Jersey recently petitioned the Supreme Court to examine its litigation against Kalshi. Such a review could establish precedent affecting the entire sector.

The high court has not indicated whether it will accept the petition. Currently, prediction marketplace operators navigate contradictory state and federal regulatory frameworks.

The Thursday filing referenced particular transactions from Polymarket’s platform. One example involved wagering on whether the Los Angeles Dodgers would defeat the New York Mets by over 1.5 runs during July. The final score showed the Dodgers prevailing 4 to 2.

The state’s legal filing indicates authorities may pursue complete prohibition of New York resident access to the platform.

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