The state of New York has sued Polymarket US for illegal gambling, almost two months after it sued Kalshi.
The lawsuit was filed Thursday by Attorney General Letitia James in the Supreme Court of the State of New York.
new-york-v-polymarket-us-petition-2026‘Persistent illegal acts’
The state claims that Polymarket US has “engaged in repeated and persistent illegal acts” by accepting bets from New York without a license. It is also accused of keeping gambling records, which is a separate offense in New York, as well as violating the federal Wire Act.
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” said AG James in a press release. “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.”
In the same press release, Governor Kathy Hochul highlighted the fact that Polymarket is available to users age 18 and up, while sportsbooks in New York have a minimum age of 21.
“I will always stand up for New Yorkers when bad corporate actors prey on consumers and threaten tax dollars that fund schools and critical public services,” Hochul said. “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. Nobody is above the law in our state, and working with Attorney General James, we are fighting to protect New Yorkers and put this illegal operation to an end.”
Injunction may be wide-reaching
New York is seeking an injunction banning Polymarket US “from continuing to operate a gambling business in New York without being licensed by the New York State Gaming Commission.”
Like with Kalshi, the Polymarket order would ban the prediction market from “operating a business that offers contracts relating to sports, culture, elections, and other events.” “Other events” here could arguably refer to all prediction market contracts, and given that Polymarket is headquartered in New York, “operating a business” could refer to offerings to customers outside of New York too.
When New York asked for a similar order against Kalshi, the Commodity Futures Trading Commission said it would make the exchange unable to function, disrupting the markets, and sent out an emergency order requiring that Kalshi keep operating if New York tries to shut it down.
On top of an order banning Polymarket’s sports contracts from the state, New York is calling on the company to “pay damages caused, directly or indirectly, by the repeated and persistent illegality,” to disgorge its profits, to pay a penalty of three times its profits from New York sports wagering, and to pay $100,000 “for each offering or attempt to offer sports wagering or mobile sports wagering within or from New York without authorization.”
Together, those payments may reach well into the billions. When it sued Kalshi, the state estimated that those payments would add up to $36 billion.
The lawsuit with Kalshi has been on pause as the prediction market called for the case to be moved to federal court. It is likely that Polymarket will attempt a similar move. Prediction markets have been unsuccessful in all of their prior attempts to have a state lawsuit heard in federal court, as the standard required to move the case is high, but the request would at minimum buy time.
