United States of America

New York Sues Polymarket, Company Countersues

Is New York right to try to shut down prediction markets or is this an unfair political attack?

SEP 25·Updated 7 days ago

New York Sues Polymarket, Company Countersues

Story

Above: Stock image of the Polymarket logo on a smartphone. Image credit: Thomas Fuller/SOPA Images/LightRocket/Getty Images

The Facts

New York Attorney General Letitia James sued Polymarket US in a Manhattan state court Thursday, alleging that the prediction market operates an illegal, unlicensed gambling business. Polymarket filed its own suit against the state hours later.
Businesstimes
CNBC
The state's suit seeks a court order halting Polymarket's operations as an unlicensed gambling business, along with civil fines, forfeiture of illegal gains and restitution to users. It was filed against QCX LLC, which is also known as Polymarket US.
Ars Technica
Bloomberg
Polymarket's countersuit, filed in Manhattan federal court, argues the Commodity Futures Trading Commission (CFTC) has exclusive authority over prediction markets and seeks a declaration that New York can't enforce its gambling laws against the company.
The Washington Examiner
Insurance Journal
Polymarket Chief Legal Officer Neal Kumar said that the company has more than 350 employees in New York and will remain there, calling the attorney general's filing a "copy/paste" of a recycled lawsuit and saying that the company would fight for its users.
ABC News
Engadget
This filing follows similar New York actions against Kalshi in July and against Coinbase Financial Markets and Gemini Titan in April. New Jersey has asked the U.S. Supreme Court (SCOTUS) to resolve who regulates prediction markets after conflicting appeals rulings.
The Washington Examiner
Cointelegraph

Sources Split

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RIGHT

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PRO
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The Spin

Narrative A

Taking bets is taking bets, and slapping a fancy "prediction market" label on it doesn't rewrite New York law. Platforms cashing in on wagers while skipping licensing are preying on vulnerable people and starving families of the services those licenses fund. States hold the authority to shut this down, and enforcing that authority is exactly right.

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Narrative B

Event contracts are federally regulated financial derivatives, and a state attorney general with a long anti-crypto streak doesn't get to override that with a recycled lawsuit. Demanding forfeited profits, refunded losses and triple fines is an attempt to bankrupt a legal business for political gain.

PYMNTS

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