New York is suing Polymarket, declaring the prediction market platform illegal gambling.

What's going on?

New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against blockchain prediction market platform Polymarket on Thursday, alleging that it operated unlicensed gambling in the state.

The case comes at a time when regulators like SEC and the CFTC are scrambling to regulate crypto-based prediction market businesses, dragging such platforms between federal and state gambling laws.

Why would the government consider it gambling?

Prosecutors concluded from their investigation that these markets fit the definition of "gambling" under New York law because users bet money on uncertain and uncontrollable outcomes.

The point the state attacked heavily was that Polymarket never applied for a license from the New York State Gaming Commission, thereby avoiding paying taxes on licensed casinos and mobile sports betting sites. This tax revenue is used to support public schools, youth athletics, and treatment of problem gambling.

Another key claim was that the platform is open to 18-20 year olds, although New York requires mobile sports betting be at least 21 years old. James said "the circumvention of New York's laws has allowed Polymarket to attack the most vulnerable groups", while Hochul noted that the company "deliberately" violated state law and endangered underage users.

How's the Polymarket side of things?

Polymarket and its competitor Kalshi claim that they are not gambling sites, but federally regulated outlets selling "event contracts", which is a kind of derivative so should fall under the jurisdiction of the CFTC rather than state gaming laws.

Interestingly, the CFTC agreed with the platform side and filed a lawsuit against nine states to claim unilateral regulation of this industry nationwide.

What does the state want from this court?

New York is asking the court to order a ban on Polymarket operating unlicensed gambling businesses in the state, confiscate all illegal proceeds, award damages to affected users and fine them three times their illegal profits.

It's part of a larger trend.

This case is just the latest in a series of New York lawsuits against neighborhood gambling platforms. Previously, James and Hochul sued Kalshi in July, and James sued Coinbase and Gemini in April on similar allegations.

As for Polymarket itself, the platform was only launched in the US last December,2025 initially offering sports betting before plans to expand into a variety of other topics.

How did it affect users in Thailand and Myanmar?

Polymarket can be accessed from all over the world via crypto, but this case signals that regulatory agencies in many countries including along the route of the SEC (Thailand) Thailand's strictly unlicensed cryptocurrency platform are watching these types of transactions. Users in Thailand and Myanmar should follow up on how U.S. courts decide because the outcome is a key determinant whether event contracts will be classified as derivative under anti-money laundering laws or gambling under criminal law for each state and country.