Polymarket sues New York Attorney General to block prediction market crackdown

In a latest update, World's largest prediction market platform, Polymarket sued New York ‌Attorney General Letitia James and other state officials to block them from regulating its prediction market.

The lawsuit was filed on Thursday evening in Manhattan federal court, after ‌James filed her own lawsuit earlier in the day accusing Polymarket of violating state law by promoting illegal gambling.

New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit accusing Polymarket of running an illegal, unlicensed gambling operation in the state.

The state argues that prediction contracts such as wagers on sports outcomes are "quintessentially gambling," bypass local tax requirements, and illegally permit users aged 18 to 20 to participate New York requires a minimum age of 21 for mobile sports betting.

Hours later, Polymarket fired back with a federal lawsuit in Manhattan targeting state officials.

Polymarket argues that state-level oversight is an "extraordinary assertion of state power" that is preempted by federal law, claiming the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over federally compliant prediction markets.

As reported, the fight is part of a broader crackdown by New York on prediction markets and sweepstakes platforms, having previously pursued companies like Kalshi, Coinbase, and Gemini.

With federal appeals courts divided on whether state gambling laws or federal financial regulations apply to these event contracts, legal experts suggest this high-stakes turf war could ultimately wind up before the U.S. Supreme Court.