Abstract:
New York state sued Polymarket US, accusing it of operating an illegal gambling business, escalating the state’s legal gambit against prediction markets. Hours later, Polymarket countersued, suing the state of New York, accusing the state of overstepping its authority to regulate trading platforms that should be regulated at the federal level.
The office of New York State Attorney General Letitia James filed a state complaint on Thursday, requesting the court to issue an injunction to stop Polymarket from operating as an unlicensed gambling institution, and require the company to pay fines, confiscate all illegal gains, and compensate users.
This is the latest legal conflict in the industry. Such platforms allow users to place bets on almost all types of events. The U.S. Commodity Futures Trading Commission considers prediction markets to be derivatives exchanges and has exclusive federal jurisdiction; however, several states have argued that local gambling regulations apply to such platforms. The U.S. Supreme Court recently received a petition to rule on the dispute.
Governor Cathy Hochul said in the announcement of the indictment: "Polymarket not only knowingly violated state law, but also put New Yorkers at risk, especially minors who are most at risk for gambling addiction."
New York State has previously sued Polymarket's main competitor Kalshi Company.
Comments