New York moves to block Polymarket from the state, alleging it's running an illegal gambling operation

New York has sued Polymarket, accusing the prediction market platform of operating an illegal gambling operation and asking a court to block it from operating in the state.

On Thursday, New York Attorney General Letitia James and New York Governor Kathy Hochul accused Polymarket of "skirting" its laws.

"By skirting New York's laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support," James said in a statement. "My office will never hesitate to take action to defend our laws and keep New Yorkers safe."

Hochul said Polymarket was putting underage New Yorkers at risk.

"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," Hochul said.

Thursday’s lawsuit marks New York's latest push to rein in prediction markets. In July, the state sued Kalshi over similar allegations. Other states, including Massachusetts and Rhode Island, have also taken legal action against Kalshi and Polymarket as a broader dispute intensifies over whether prediction markets should be regulated primarily by the states or the federal government.

New York prosecutors argue that Polymarket's contracts meet the state's definition of gambling and therefore require a license from the New York State Gaming Commission. They also accuse the company of avoiding taxes associated with regulated gambling operations.

"This tax revenue from gambling regulation funds public schools, sports programs for underserved youth, and problem gambling education and treatment," the NYAG said in a statement.

New York said it wants the court to direct Polymarket to permanently stop doing business, including advertising, in the state until it properly registers and said it needs to pay $100,000 among other fines.

Polymarket Chief Legal Officer Neal Kumar said the company is staying in New York and said it had been working with them to address concerns.

"Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here, embodying why people and businesses come here to make it," Kumar said. "We believe in New York and we're staying here."