Polymarket sued in New York, launching counter-lawsuits of its own

• New York State's AG has gone after Polymarket, accusing it of illegal gambling
• Polymarket has filed a number of lawsuits, seeking to move the case away from state court to a federal one and targeting the state's Gaming Commission and AG
• Polymarket denies NYS' arguments that it is offering illegal gambling

New York State is suing Polymarket U.S., with the Attorney General’s Office launching a legal complaint against the company on Thursday, alleging that the prediction market platform offered unregulated gambling in the state.

However, just hours later in the day, Polymarket launched counter lawsuits, including complaints that named state officials and the Gaming Commission. The main complaint wants to see the case moved from a state court in Manhattan to a federal court.

New legal tug of war between Polymarket and New York State

In her complaint, New York AG Letitia James wrote that Polymarket was skirting the state’s gambling laws and targeting its most vulnerable, depriving families of critical services and support.

New York Gov. Kathy Hochul has backed the move against Polymarket, echoing the sentiment expressed by the AG’s Office.

"By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law; they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming," Hochul added.

The new lawsuit arrives mere months after the Empire State directed a similar move against Kalshi, a Polymarket competitor. Polymarket has hurried to launch a counter lawsuit of its own, urging the main case to be taken away from the state court in Manhattan and granted to the U.S. District Court for the Southern District of New York.

Polymarket has also filed separate civil lawsuits against AG James and the New York State Gaming Commission, insisting that states are not allowed to interfere with federal laws and regulations.

"This action seeks to prevent imminent and irreparable harm arising from New York’s enforcement of state gambling laws against federally regulated derivatives exchanges — enforcement Congress has expressly prohibited," Polymarket said in its complaint.

New York wants Polymarket to pay for "illegal gambling"

New York’s complaint is seeking to secure a penalty payment from Polymarket, which the state estimates as "three times the amount of any Polymarket gains" while operating in the state.

The state also insists that Polymarket must pay $100,000 for each attempt to offer sports wagering or mobile wagering, as the complaint describes Polymarket’s actions.

Polymarket has also reminded in a statement that the company was founded in a "tiny apartment" in New York City, and that it employs 350 people locally, serving as an example of why people choose the city to spearhead their business ideas.

"We believe in New York, and we’re staying here. While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users," said Neal Kumar, the chief legal officer for the platform.

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