Polymarket US is facing a lawsuit announced by New York Attorney General Letitia James and Governor Kathy Hochul, who allege the prediction market operated illegal, unlicensed gambling in the state. The petition, filed in Manhattan state court, says Polymarket offered wagers on sporting events without a New York gambling license and exposed users below the state’s legal gambling age of 21 to those markets. New York is seeking to halt the activity, impose fines, forfeit alleged illegal proceeds and provide restitution to users. The case also challenges the view that Polymarket’s return to the U.S. market through regulated exchange infrastructure and the federal commodities framework overrides state gambling law.