The state’s case argues that Polymarket‘s event contracts meet the legal definition of gambling, since the outcomes are uncertain and outside the control of the person betting. It also says the company holds no license from the New York State Gaming Commission, which lets it avoid the taxes that licensed casinos and mobile sportsbooks pay. The filing accuses Polymarket of offering betting under the label of event contracts, with James asking the court to order Polymarket to return money, pay restitution, and cover fines.
Governor Hochul stated:
“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.”
Addressing the lawsuit, Polymarket went to Manhattan federal court to stop James and other state officials from regulating its platform. The company says its event contracts are federally regulated derivatives that sit outside state gaming law.
Polymarket shared in its lawsuit:
“This action seeks to prevent imminent and irreparable harm arising from New York’s enforcement of state gambling laws against federally regulated derivatives exchanges, enforcement Congress has expressly prohibited.”
Polymarket is now the fourth prediction market New York has taken to court, as the state sued Kalshi almost two months ago and filed similar cases against Coinbase and Gemini in April 2026.
