(NEW YORK) -- New York Attorney General Letitia James on Thursday filed suit against the prediction market Polymarket, accusing it of being an illegal gambling operation that is operating in New York without a license.
The lawsuit mirrors the one James' office filed against the prediction market Kalshi and, if successful, could affect Polymarket's ability to operate. The suit asks a court to order Polymarket to forfeit money, distribute restitution, and pay fines.
Polymarket launched in the United States in December 2025 as a service that allowed users to bet money on the outcome of sporting events, and has expanded to allow wagers on everything from current events to weather patterns.
As the world's largest prediction market platform, the service, according to one estimate, is on pace to facilitate more than $70 billion in trading in 2026 -- more than triple the volume it handled in 2025.
Polymarket's global website, registered in Panama, is supposed to be off limits in the U.S., and the U.S.-approved version of the site offers fewer trades than its international platform. But there is evidence that many Americans have managed to access the international site -- which offers trading on subjects like war, which is banned in the U.S. -- using digital workarounds, like virtual private networks known as VPNs.
James suit claims that Polymarket's prediction market is an illegal, unlicensed gambling operation that exposes New Yorkers -- including those under the legal gambling age of 21 -- to serious personal and financial risk. State law prohibits wagering on games involving New York college teams and all sports betting for those under 21.
"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 lawsuit.
Polymarket's chief legal officer said in a statement that the platform would fight the suit.
"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," said chief legal officer Neal Kumar. "While the AG's decision to copy/paste a recycled lawsuit is disappointing, we'll fight for our users."
"Any time the AG'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," the statement said.
The platform has insisted its event contracts are federally regulated derivatives outside the scope of state gaming laws.
James' lawsuit, however, said Polymarket's prediction markets meet the legal definition of gambling because the outcomes of the events on which its users are betting are uncertain and outside the control of the bettor, or hinge on a game of chance.
Despite this, the lawsuit said, Polymarket has failed to obtain a license from the New York State Gaming Commission, allegedly sidestepping its obligation to pay taxes like licensed casinos and mobile sports gambling platforms do.
Multiple lawsuits across the country claim prediction markets like Polymarket and Kalshi fall under state jurisdiction -- but if James' suit is successful, Polymarket could be forced to pay billions of dollars and change the way it operates nationwide.
"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 Gov. Kathy Hochul said in a statement at the time of the filing of the suit.
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