Engadget
The state now has illegal gambling charges underway against four of these businesses.
The state of New York continues to take action against prediction markets, arguing that they are running illegal gambling businesses. Today, the state's Attorney General Letitia James and Governor Kathy Hochul announced a new lawsuit against the domestic branch of Polymarket. The duo are seeking a court order "stopping Polymarket from operating as an unlicensed gambling business in New York state," according to the AG's office.
James also has a similar lawsuit underway against Kalshi that launched in July and she sued Coinbase Financial Markets and Gemini Titan in April. New York is one of several states attempting to reign in prediction markets and regulate them as gambling operations. Some of the state-level suits, including this latest action by New York against Polymarket, also argue that the prediction markets allow underage betting. Most prediction market users must be over 18, but the minimum age for sports betting in many states is 21.
However, the US Commodity Futures Trading Commission has intervened and counter-sued some states for those efforts. The federal agency has alleged that it should be the sole regulator for prediction markets and claims that the states' legal actions fall outside their jurisdiction.
The courts have been divided thus far on the question of prediction market regulation. The first ruling on the topic, which came from a panel from the 3rd US Circuit Court of Appeals, sided with the CFTC over New Jersey. However, the 9th Circuit Court of Appeals favored Nevada's case against Kalshi last month, blocking the company's attempt to prevent the state from regulating its activities.