New York sues to block Polymarket over alleged illegal gambling

New York sued Polymarket on Thursday and accused the prediction market platform of operating an illegal gambling operation. New York asked a court to block Polymarket from operating in the state. New York Attorney General Letitia James and Governor Kathy Hochul accused Polymarket of skirting state laws. Hochul said Polymarket was putting underage New Yorkers at risk. New York prosecutors argue that Polymarket's contracts meet the state's definition of gambling and require a license from the New York State Gaming Commission. Prosecutors also accuse Polymarket of avoiding taxes linked to regulated gambling operations. The New York attorney general's office said gambling tax revenue funds public schools, sports programs for underserved youth, and problem gambling education and treatment. New York wants the court to permanently stop Polymarket from doing business in the state, including advertising, until the company properly registers. New York said Polymarket should pay $100,000 among other fines. New York sued Kalshi over similar allegations in July. Massachusetts and Rhode Island have also taken legal action against Kalshi and Polymarket. The legal disputes concern whether prediction markets should be regulated mainly by states or by the federal government. Kumar said Polymarket was founded in a New York City apartment and now has more than 350 employees in New York. Kumar said the company believes in New York and is staying there.