New York and Polymarket File Dueling Lawsuits Over Prediction Market Regulation
New York State sued Polymarket on Thursday, alleging it operates an illegal, unlicensed gambling platform in violation of state laws. Polymarket responded hours later by filing a countersuit in federal court, arguing that the Commodity Futures Trading Commission (CFTC) has exclusive authority to regulate prediction markets and that state enforcement is prohibited by federal law. The dispute centers on whether event contracts constitute gambling or federally regulated derivatives. New York seeks penalties including tripled gains and $100,000 per illegal wager offer, while Polymarket claims state actions create an 'impossible choice' between compliance and criminal liability. This legal clash follows similar suits against competitors like Kalshi and reflects a broader national conflict between state gambling regulators and federal authorities over prediction market oversight.
