New York sues Polymarket over allegations of illegal gambling operations

SaveSharefacebookxwhatsapp-strokecopylinkThe Polymarket lawsuit is the latest in a wave of lawsuits against prediction market platforms [File: Dado Ruvic/Reuters]By Al Jazeera Staff and ReutersPublished On 24 Sep 202624 Sep 2026New York State has filed a lawsuit against prediction market company Polymarket amid allegations that it violated state laws against illegal gambling.The suit, filed on Thursday by New York State Attorney General Letitia James, comes two months after the state filed a similar lawsuit against competitor Kalshi. That followed the state suing Coinbase and Gemini for offering users the ability to bet on “sports, entertainment, and elections, in violation of New York laws”, according to a release from the attorney general’s office at the time.Recommended Stories list of 4 itemslist 1 of 4Google employee charged with insider trading over Polymarket betslist 2 of 4Prediction platform Kalshi to collect job details to combat insider tradinglist 3 of 4Who has profited most from the war on Iran?list 4 of 4New York sues Kalshi, says its prediction markets are ‘illegal gambling’end of listThe state accused all the companies of operating without licences from the State Gaming Commission.“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” James said in a statement announcing the suit.“By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support. My office will never hesitate to take action to defend our laws and keep New Yorkers safe.” The suit also alleges that the company encouraged gambling among young people. It accuses Polymarket of targeting users as young as 18, while state law requires users to be at least 21 years old to take part in mobile sports betting.“By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming,” New York Governor Kathy Hochul said in a statement.The more than 30-page lawsuit claims that Polymarket, which is valued at more than $20bn, has advertised sports betting in particular since July 2025. It pointed to a post on X from August 17, 2025, about the launch of its US mobile app that said it was “BAD NEWS (For sportsbooks)”.Prediction markets allow users to wager on so-called event contracts, covering political events, sports, elections and even award shows. Concerns about the role of prediction markets came to a head earlier this year when wagers were made in the hours before the United States and Israel first struck Iran, prompting widespread backlash in Washington.Polymarket pushed back on the allegations.“We chose to engage with them directly on the substance and address their concerns,” chief legal officer Neal Kumar said in a statement. “They preferred the media hit. Any time the [attorney general’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.”Kalshi is facing similar allegations in New York State. Kalshi has been critical of reporting on lawsuits against it and allegations that it is akin to a sports betting or gambling platform.Polymarket did not respond to Al Jazeera’s request for comment.The Polymarket lawsuit comes days after reporting from the Wall Street Journal that alleged a wave of users had linked stolen bank debit cards and then used them to make wagers, effectively draining the accounts. According to the report, when CEO Shayne Coplan was made aware of the issue, he responded: “Just keep growing and pay a fine if regulators ever find out.”Political pressureNew York State’s lawsuit joins a growing list of states that have sued prediction market platforms, including Arizona, Massachusetts, Nevada and many others. Those states are at odds with the federal government, as the Commodity Futures Trading Commission has claimed that the federal agency exerts authority over the regulation of prediction markets.Polymarket has close ties with the family of US President Donald Trump. The prediction market platform has investment from 1789 Capital, a venture capital firm backed by Donald Trump Jr, the president’s eldest son, who also serves on the company’s advisory board.