New York's Polymarket lawsuit marks another prediction market showdown between state and federal regulators

New York Attorney General Letitia James filed a lawsuit against prediction markets platform Polymarket on Thursday, alleging that the company's sporting event contracts violate state gambling laws. The complaint cites Polymarket's mobile app launched in December 2025 and its advertising practices directed at New York residents, and state officials said they could seek to block the platform from state users.

"[Polymarket] seeks to avoid the legal and financial consequences of New York's close regulation of gambling by offering what is quintessentially wagering under the guise of 'event contracts' on a 'prediction market,'" the filing stated.

The action follows similar moves by New York officials, including a July lawsuit against Kalshi and April litigation against prediction market platforms operated by Coinbase and Gemini. The cases highlight ongoing friction between state authorities and federal regulators over oversight of the prediction markets industry. US Commodity Futures Trading Commission Chair Michael Selig has said the federal agency holds "exclusive jurisdiction" over such companies.

Earlier this month, New Jersey officials petitioned the US Supreme Court to hear arguments in their case against Kalshi, seeking a ruling that could clarify regulatory authority over prediction markets. The court has not announced whether it will take up the matter. The New York City Council has also announced a probe into "predatory marketing practices" on prediction markets.