New York State sued Polymarket US, accusing it of operating an illegal gambling business, escalating the state's legal game against predicting markets. A few hours later, Polymarket filed a counterlawsuit, suing New York State, accusing the state of exceeding its authority to regulate a trading platform that should have been regulated at the federal level. New York Attorney General Lititia James's office filed a lawsuit with the state government on Thursday, requesting the court to issue an injunction prohibiting Polymarket from operating as an unlicensed gambling agency, and requiring the company to pay fines, seize all illegal proceeds, and pay compensation to users. This is the latest legal conflict in the industry. Such platforms allow users to bet on almost any type of event. The US Commodity Futures Trading Commission believes that the prediction market is a derivatives exchange with exclusive federal jurisdiction; however, several states argue that local gaming regulations apply to such platforms. The US Supreme Court has recently received an application to decide on this dispute. Governor Cathy Hochul said in the lawsuit notice: “Polymarket not only knowingly violates state laws, but also puts New Yorkers at risk, especially the minors most prone to gambling addiction.” New York State has previously sued Polymarket's main competitor Kalshi Corp.

New York State sued Polymarket US, accusing it of operating an illegal gambling business, escalating the state's legal game against predicting markets. A few hours later, Polymarket filed a counterlawsuit, suing New York State, accusing the state of exceeding its authority to regulate a trading platform that should have been regulated at the federal level. New York Attorney General Lititia James's office filed a lawsuit with the state government on Thursday, requesting the court to issue an injunction prohibiting Polymarket from operating as an unlicensed gambling agency, and requiring the company to pay fines, seize all illegal proceeds, and pay compensation to users. This is the latest legal conflict in the industry. Such platforms allow users to bet on almost any type of event. The US Commodity Futures Trading Commission believes that the prediction market is a derivatives exchange with exclusive federal jurisdiction; however, several states argue that local gaming regulations apply to such platforms. The US Supreme Court has recently received an application to decide on this dispute. Governor Cathy Hochul said in the lawsuit notice: “Polymarket not only knowingly violates state laws, but also puts New Yorkers at risk, especially the minors most prone to gambling addiction.” New York State has previously sued Polymarket's main competitor Kalshi Corp.