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New York sued Polymarket on Thursday and is seeking at least $4.6 billion in damages, claiming the prediction-market platform has been offering unlicensed gambling in “flagrant disregard” of the state’s laws.
The suit was filed in New York State court, although Polymarket has already removed the suit to federal court in an attempt to to fight the case in a more favorable jurisdiction. The petition features eight causes of action, including violations of the New York State Constitution and the Federal Interstate Wire Act.
New York wants a judge to rule that Polymarket must “forfeit all illegal gains, distribute restitution to consumers who were harmed, and pay fines equal to three times the gains the company made through its illegal actions.”
The petition does not specify a damages amount, but a source familiar with the matter tells Front Office Sports it seeks at least $4.6 billion in damages.
The suit challenges Polymarket’s policy of allowing users as young as 18 to place bets on its app, noting that New York law requires someone to be at least 21 to gamble. It also says Polymarket operates without the “consumer protections and internal controls” that are necessary as part of New York’s “strict regulation of licensed gambling.”
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” New York attorney general Letitia James said in a statement. “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support.”
In a statement responding to the suit, Polymarket’s chief legal officer Neal Kumar noted that the company was “founded in a tiny NYC apartment” and has grown to employ more than 350 people.
“We believe in New York and we’re staying here,” he said. “While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users.”
Later on Thursday, Polymarket countersued New York in federal court seeking an order that would block New York from enforcing its gambling laws against the company. Polymarket’s suit says New York’s lawsuit represents “a real and imminent risk” to the company.
New York sued Kalshi in July, seeking at least $36 billion in damages and calling the company an “illegal gambling operation.” The state has also sued Coinbase and Gemini over their prediction-market offerings.
Kalshi and other prediction-market companies are involved in more than 20 lawsuits, including cases against state AGs and suits from consumers and Native American tribes. One of the suits involving Kalshi just reached the U.S. Supreme Court’s doorstep, although there’s no guarantee that court will take up the case.
Polymarket avoided such legal battles for much of last year, but has faced a number of lawsuits since relaunching in the U.S. in December following nearly four years during which it was barred from operating in the country under a settlement with the Commodity Futures Trading Commission reached in 2022.
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