Stories
New York Sues Polymarket Over ‘Illegal Gambling’; Polymarket Sues Back Hours Later
- •New York Attorney General Letitia James' office sued Polymarket US, alleging it operates an illegal gambling business and seeking fines, forfeiture of gains, and restitution to users.
- •Hours later, Polymarket filed a countersuit against New York, accusing the state of overstepping its authority by attempting to regulate a federally supervised exchange.
- •Governor Kathy Hochul stated that Polymarket knowingly violated state law and put New Yorkers, especially underage individuals, at risk of problem gaming.
- •Polymarket's Chief Legal Officer Neal Kumar emphasized the company's New York roots and its attempts to engage with state officials, calling the state's lawsuit a "recycled lawsuit."
- •The legal dispute highlights a broader conflict between states, which claim their gaming laws apply, and the US Commodity Futures Trading Commission (CFTC), which views prediction markets as derivatives exchanges under federal jurisdiction.
Key Questions Answered
New York sued Polymarket US for allegedly operating an illegal gambling business, with Attorney General Letitia James seeking a court order to block operations, impose fines, forfeit illegal gains, and pay user restitution. Governor Kathy Hochul stated that the platform put New Yorkers, especially vulnerable underage users, at risk for problem gaming.
Hours after New York filed its lawsuit, Polymarket hit back with its own suit accusing the state of overstepping its authority to police a federally regulated exchange. Polymarket's complaint argues that the enforcement action is invalid because its US operations are exclusively overseen by the CFTC.
The US Commodity Futures Trading Commission views prediction markets as derivatives exchanges that are exclusively subject to federal jurisdiction rather than state gaming laws. Under Chairman Michael Selig, the agency has embraced the industry and even sued states attempting to take action against these prediction platforms.
