New York Attorney General Letitia James sued Polymarket on 24th September, 2026, alleging the prediction market runs an unlicensed gambling operation. The state wants a judge to block the company from operating in New York.
The Brief
- New York Attorney General Letitia James filed the petition in state court in Manhattan over Polymarket’s lack of a state gaming license.
- The state is seeking civil fines, forfeiture of illegal gains and full restitution to Polymarket customers in New York.
- Polymarket lets 18- to 20-year-olds trade on its platform, though New York sets 21 as the minimum age for mobile sports betting.
- Kalshi, Coinbase Financial Markets and Gemini Titan drew similar lawsuits from New York within the past five months.
A Dodgers-Mets contract anchors the gambling claim
James views prediction markets as “quintessentially gambling” because users wager on events they don’t control and expect a payout when they win. Her petition tests that idea against several recent Polymarket contracts.
One contract asked whether the Los Angeles Dodgers would beat the New York Mets on 24th July 2026 by more than 1.5 runs. The Dodgers won 4-2. A half-run margin is the format sportsbooks use for baseball spread bets, which makes this a pointed exhibit from a state that licenses sportsbooks.
New York sues Polymarket U.S., two months after filing lawsuit against Kalshi https://t.co/D3d9TKUBE1
— CNBC (@CNBC) September 24, 2026
The petition accuses Polymarket of operating without required licenses from the New York State Gaming Commission. By allowing gambling without state oversight, James said in the filing, Polymarket is “exposing New Yorkers to gambling addiction with few, if any, safeguards.“
Governor Kathy Hochul went further. She said:
Under-21 users give the state its simplest argument
New York objected specifically to Polymarket admitting 18- to 20-year-olds. Every petition in the state’s series makes a related charge. Each accuses the operators of encouraging problem gambling, particularly among people under 21, and of endangering users’ financial, emotional and physical health.
Jurisdiction fights over federal preemption can run for years. The age question is easier to put in front of a judge. A 19-year-old can’t legally place a mobile sports bet with a licensed New York operator. The state says that same person can trade a similar contract on Polymarket.
The filing doesn’t by itself cut off New York users with open positions. A judge would have to grant the state’s request first. Reviewing how Polymarket’s account terms handle restricted jurisdictions is the practical step while the case moves.
Polymarket says it tried to talk first
“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.“
Kumar added that the company would fight for its users. He noted that Polymarket started in a small New York City apartment and now employs more than 350 people there. The company, he said, intends to stay.
Prediction market operators describe their products as closer to a stock exchange than a sportsbook. Customers trade event contracts against other customers, and prices move with that trading. The platforms say they collect only a fee. Sports contracts are the best known, though users can also bet on elections and cultural events such as the Oscars.
A federal green light meets a state courtroom
Polymarket, founded in 2020, bills itself as “the world’s largest prediction market.” It spent more than three years outside the US. The relaunch came last December, three months after the Commodity Futures Trading Commission (CFTC) cleared its return.
That federal approval sits at the center of the dispute. The CFTC claims exclusive authority to regulate prediction markets, which puts the Trump administration at odds with New York and other states. Federal appeals courts have split over who should oversee the industry. Kalshi, which New York sued two months ago, is a party to the court fight over federal oversight.
Venture firm 1789 Capital, backed by Donald Trump Jr., invested in Polymarket last year. Trump Jr. is a partner at the firm and a Polymarket adviser. New York said the value of Polymarket’s business reportedly exceeds $20 billion. That scale gives weight to the state’s forfeiture and restitution demands.
The industry’s growth took off after prediction markets outperformed pollsters in calling Donald Trump’s 2024 win over Kamala Harris. New York’s filings now run from Coinbase Financial Markets and Gemini Titan five months ago, to Kalshi, to Polymarket. Because each petition makes the same licensing claim, a ruling in one could shape how judges read the others.
The Bottom Line
Public accounts of the filing leave gaps. Neither the state nor Polymarket has said how many New Yorkers trade on the platform, or how many are between 18 and 20. No restitution figure has surfaced either.
A state judge in Manhattan now decides whether to grant New York’s request to bar Polymarket from the state. Above that court, the appeals split over federal and state authority keeps a US Supreme Court review in play.
