Polymarket gets hit with class action lawsuit over sports betting

Polymarket, a cryptocurrency-based prediction market, is being sued in a class action lawsuit filed in the Southern District of New York. The plaintiff, Lorenzo Miro San Diego, alleges that Polymarket operates as an illegal, unregulated sports betting platform, violating New York’s sports betting regulations. San Diego’s attorneys claim Polymarket “expressly repositioned itself as a nationwide sportsbook” without the necessary state licenses, knowingly defying anti-gambling laws.

This lawsuit follows similar actions against other prediction markets like Kalshi, which received a cease-and-desist letter and is currently embroiled in a legal battle with New York regulators. Nevada regulators recently won a temporary restraining order against Polymarket, blocking event-based contracts in the state. The lawsuit argues that Polymarket’s “predictions market” status is a facade to conceal its function as an illegal gambling operation, citing over $6 billion in sports-related contracts.

San Diego, who claims to have lost money betting on the platform under the assumption it was legal, is seeking a jury trial on behalf of all nationwide users who wagered on Polymarket. New York legalized in-person sports betting in 2019 and expanded to mobile betting in 2022 with nine licensed operators, all subject to state regulations.

(Source：AM New York)