New York Attorney General Letitia James has sued prediction markets platform Polymarket, alleging that the company is operating an illegal gambling business by offering contracts tied to sporting events to state residents.

State officials filed the lawsuit on Thursday, arguing that Polymarket's prediction market event contracts violate New York's gambling laws. The action follows a similar case against Kalshi in July and litigation against prediction market platforms run by Coinbase and Gemini in April, making Polymarket the latest in a string of platforms the state has targeted. The attorney general's office announced the case in a press release.

Thursday's filing cited Polymarket's sporting event contracts offered through its mobile app, which launched in December 2025, as well as the company's advertising practices directed at New Yorkers. According to the filing, state officials could also seek to block access to the platform for residents — a step that would take the service out of reach for New York users.

“[Polymarket] seeks to avoid the legal and financial consequences of New York's close regulation of gambling by offering what is quintessentially wagering under the guise of ‘event contracts' on a ‘prediction market,'” the filing said.

Prediction markets allow users to trade contracts tied to the outcomes of real-world events, with prices reflecting the perceived probability of each result. Polymarket, a crypto-based platform, gained widespread attention during the 2024 United States presidential election. In 2022, the company reached a settlement with the US Commodity Futures Trading Commission (CFTC) and agreed to block users located in the United States.

The case against Polymarket is the latest example of US state authorities at odds with federal agencies over who has authority in regulating and overseeing prediction markets. CFTC Chair Michael Selig has claimed that the federal agency has “exclusive jurisdiction” over such companies. How that dispute is resolved could determine whether prediction market operators answer to a single federal regulator or face gambling oversight state by state.

Earlier this month, New Jersey officials petitioned the US Supreme Court to hear arguments in the state's case against Kalshi, seeking a decision that could clarify who should oversee the prediction markets industry. The court has not announced whether it will weigh in on the matter.

Separately, the New York City Council has announced a probe into what it described as “predatory marketing practices” on prediction markets.