New York Attorney General sues Polymarket for illegal gambling

New York Targets Polymarket in Unlicensed Gambling Suit

The move sharply intensifies regulatory scrutiny on prediction markets. These platforms occupy a grey area where users wager on sports, political elections, and cultural events like the Oscars.

New York state law explicitly prohibits bets that run counter to public interest, including events tied to war or targeted violence.

State Officials Cite Risks to Minors and Vulnerable Users

New York Governor Kathy Hochul stated in a release that by operating an unlicenced gambling service, Polymarket violated state law and endangered New York residents, particularly minors who are especially susceptible to problem gambling.

Demands for Restitution and Disgorgement of Profits

The state’s lawsuit demands civil penalties, the disgorgement of illegal profits, and full financial restitution for platform users.

The regulatory push follows mounting concerns over market manipulation and insider wagering tied to real-world outcomes.

Suspicious Wagers and Corporate Earnings Tests

Instances of suspicious wagering have previously drawn public attention across similar platforms. A White House teleprompter operator amassed significant winnings by betting on specific words used during United States presidential addresses.

In a separate instance, a Coinbase chief executive learned during a quarterly earnings presentation that users were placing financial wagers on particular words he might utter. To test the phenomenon, he casually spoke those words near the end of his presentation without any contextual relevance.

Approximately 84,000 U.S. dollars had been staked across Kalshi and Polymarket on those terms, resulting in substantial payouts for the bettors.