New York Attorney General Letitia James filed a lawsuit against Polymarket on Thursday, alleging the prediction market platform's sports event contracts amount to illegal gambling under state law. The case follows similar state action against Kalshi, Coinbase, and Gemini, and deepens a jurisdictional fight between states and the Commodity Futures Trading Commission (CFTC) over who regulates prediction markets.
New York targets Polymarket's sports contracts
New York state officials filed a lawsuit against Polymarket on Thursday, alleging that the company's prediction market event contracts violate state gambling laws. The filing cites Polymarket's sporting event contracts on its mobile app, which launched on Dec. 3, 2025, along with its advertising practices toward New Yorkers. State officials could also seek to block the platform for New York residents.
The state's filing argues Polymarket seeks to avoid the legal and financial consequences of New York's close regulation of gambling by structuring wagers as event contracts. According to the filing: "quintessentially wagering under the guise of 'event contracts' on a 'prediction market'".
Ahead of the U.S. launch, the suit points to marketing that advertised users could trade every football game in all 50 states, and says Polymarket later called its platform legal in all 50 states. New York disputes that claim and singles out users ages 18 to 21 as particularly vulnerable.
Part of a broader crackdown
Thursday's action follows a similar lawsuit against Kalshi in July and litigation against Coinbase and Gemini in April. New York AG James said the suits defend gambling laws that fund educational and public benefit programs.
The case is the latest example of state authorities clashing with federal agencies over prediction market oversight. CFTC Chair Michael Selig has claimed the agency holds exclusive jurisdiction over the companies. Federal appeals courts remain split. The 9th Circuit sided with Nevada in its case against Kalshi, ruling that the sports contracts are sports bets. However, the 3rd Circuit ruled against New Jersey, finding the CFTC has exclusive jurisdiction over sports prediction markets.
Supreme Court petitions still pending
Earlier this month, New Jersey officials petitioned the U.S. Supreme Court to hear arguments over the Kalshi case, seeking a ruling that could clarify who oversees the industry. The court has not announced whether it will take up the matter.
Two certiorari petitions are currently before the court. Polymarket data cited by traders shows only a 25% chance the Supreme Court will accept a sports events contract case by December.
Sources: Cointelegraph, Bitcoin.com, CoinGape
Trading involves risk.
Risk Disclaimer
