New York Accuses Polymarket of Illegal Betting as Prediction Market Platform Countersues

^{Letitia James, New York Attorney General, and Shayne Coplan, CEO of Polymarket.}

New York Attorney General Letitia James and prediction market platform Polymarket have filed lawsuits against each other in a dispute over whether the state can apply its gambling laws to the company.

New York authorities allege that Polymarket is operating an unlicensed gambling business in the state.

The Attorney General’s Office also takes issue with the fact that the platform is accessible to users aged 18 to 20, while the minimum age for online sports betting in New York is 21.

The state is seeking to stop Polymarket from operating in New York, impose financial penalties, recover proceeds it considers unlawfully obtained and secure refunds for users.

Just hours after the state filed its lawsuit, Polymarket brought its own case in federal court.

The company argues that its prediction markets are regulated at the federal level by the US Commodity Futures Trading Commission (CFTC), meaning New York has no authority to subject them to state gambling laws.

Federal courts have yet to establish a consistent approach to such disputes. In April 2026, a court sided with prediction market platform Kalshi in its case against New Jersey and temporarily blocked the state from enforcing its gambling laws against the company. At that stage of the proceedings, the court found Kalshi’s arguments for exclusive federal regulation sufficiently persuasive.

In August, however, a court reached the opposite conclusion in a similar dispute with Nevada, allowing the state to apply its gambling regulations to Kalshi’s sports-related contracts.

The CFTC is also separately suing New York. In April 2026, the commission asked a court to recognise its exclusive jurisdiction over event contracts traded on platforms it regulates and to prevent the state from applying gambling laws that conflict with federal law.

New York authorities have previously sued Kalshi as well. In July, the state Attorney General’s Office accused the company of operating an unlicensed gambling business and sought to halt its activities in New York.