New York Attorney General Letitia James has sued Polymarket, alleging the prediction market is operating as an unlicensed gambling business in the state. The complaint asks a court to order Polymarket to forfeit money, pay restitution, and pay fines, and says the platform exposes New Yorkers, including people under 21, to serious financial risk.

Polymarket responded the same day with its own lawsuits against James and officials of the New York State Gaming Commission, including a case in federal court. The company argues that the Commodity Futures Trading Commission has exclusive authority over prediction markets, which would place its event contracts outside state gambling regulation.

Polymarket began serving US users in December 2025 and now lists contracts on sports, current events, and other outcomes. The New York action arrives about two months after the state filed a similar case against Kalshi, making it part of a wider conflict between state gaming authorities and federally regulated event-contract venues.

The immediate question is which court hears the dispute first and whether either side seeks an early order restricting the other. The broader outcome will help decide whether sports-based event contracts are governed nationally by the CFTC or state by state.