The State of New York is suing the prediction market platform Polymarket, claiming it has been running an illegal, unlicensed gambling operation in the state. The lawsuit comes two months after the state sued Kalshi for $36 billion and attempted to shut it down for the same reasons.
According to the lawsuit, Polymarket has avoided paying the taxes licensed casinos and mobile sports betting platforms must pay because it has never obtained a license from the New York State Gaming Commission.
“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,” New York Governor Kathy Hochul said in a statement.
The state is requesting that a court order Polymarket to cease operation as an unlawful gambling enterprise in New York, forfeit all illegal gains, pay $100,000 for each attempt or offer of “sports wagering or mobile sports wagering” in New York, and pay fines equivalent to three times its illegal gains. It also wants Polymarket to provide an account of all trades placed and the amount of money users lost on the platform.
This is the fifth lawsuit New York has filed against prediction market operators
The lawsuit against Polymarket also comes five months after New York filed similar petitions against two other prediction market operators, Coinbase Financial Markets and Gemini Titan. They, along with Kalshi, were all charged with operating without the necessary permits from the New York State Gaming Commission.
“No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” New York Attorney General Letitia James said in July. “By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process.”
Similar to Kalshi, which stated that it was “sad to see this type of political theater,” Polymarket expressed unhappiness with New York’s decision to file a lawsuit.
“We chose to engage with them directly on the substance and address their concerns,” Chief Legal Officer Neal Kumar said in a statement, according to Reuters. “They preferred the media hit. Any time the (attorney general’s) office wants to swing by, our door is open for a conversation about how we protect consumers and offer fair, transparent and legal markets.”