Full Breakdown
New York Sues Polymarket Over Alleged Illegal Gambling Operations
By Drooid · · How we work
Core Event: State Lawsuit Targets Prediction-Market Platform
On December 15, 2025, New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit in Manhattan state court against Polymarket U.S. The complaint alleges that the prediction-market platform operates an illegal, unlicensed gambling business, allowing users—including those under the state-mandated gambling age of 21—to place contracts on sports events, elections and other outcomes. The suit seeks civil fines, forfeiture of illegal gains, and full restitution to affected users.
Background & Context
The action follows a July 2026 lawsuit against rival platform Kalshi, marking an escalating state-level push against prediction markets that officials say violate gambling statutes. The Commodity Futures Trading Commission (CFTC) regulates such platforms at the federal level and has previously challenged state efforts, asserting “exclusive jurisdiction” over the industry. New York’s filing therefore intensifies a broader jurisdictional dispute between state regulators and the CFTC.
Data & Statistics
- Polymarket U.S. launched in December 2025 and is regulated by the CFTC.
- The company reports more than 350 employees in New York City.
- The complaint requests penalties of three times any gains Polymarket earned and $100,000 for each alleged sports-wagering offer in the state.
- The lawsuit also demands a full accounting of all trades, user losses, and the platform’s earnings.
Official Statements & Responses
Attorney General James framed the action as enforcement of New York’s gambling laws, emphasizing protection of vulnerable residents. Governor Hochul described the platform as a “bad corporate actor” that endangers underage New Yorkers. Polymarket’s chief legal officer, Neal Kumar, called the suit “disappointing,” asserting the company’s compliance efforts and willingness to discuss consumer-protection concerns with state officials.
Conflicting Reports & Gaps
- Sources differ on the precise age range cited: the complaint highlights users 18-20 as underage, while New York law sets the gambling age at 21.
- The lawsuit specifies per-violation fines but does not disclose an overall monetary ceiling, leaving the total potential liability unclear.
- The CFTC has not provided comment, and its exact stance on the New York filing remains unverified.
Verbatim Quotes
- “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,” — Governor Kathy Hochul
- “Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs. 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,” — Attorney General Letitia James
- “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. We believe in New York and we're staying here. While the AG's decision to copy/paste a recycled lawsuit is disappointing, we'll fight for our users,” — Neal Kumar
What’s Next
The complaint seeks a court order to block Polymarket from operating in New York and to impose the outlined penalties. The platform has indicated it will contest the suit while remaining open to dialogue. Parallel litigation by the CFTC against several states and pending Supreme Court consideration of a related Kalshi case suggest further legal developments that could shape the regulatory landscape for prediction markets nationwide.