On Thursday, New York initiated legal proceedings against the prediction market Polymarket, contending that the platform constitutes an unlicensed gambling enterprise and petitioning a judge to enjoin the company from operating within the state.

The lawsuit constitutes the most recent legal challenge emanating from a state endeavoring to curtail popular and now-ubiquitous betting applications that permit individuals to place wagers on virtually any subject, encompassing sports, weather, elections and technology.

Prediction market platforms have contended that states lack the authority to regulate them, on the grounds that they fall under the purview of the U.S. Commodity Futures Trading Commission at the federal level.

New York officials lodged Thursday’s lawsuit against Polymarket in state court, seeking fines and restitution for users on the grounds that the platform failed to secure a gaming license from the state.

The state has previously sued other platforms, among them Kalshi, Coinbase and Gemini, on a comparable rationale.

“In operating an unlicensed gambling enterprise, Polymarket has not merely knowingly contravened state law; it has imperiled New Yorkers, particularly those underage, who are most susceptible to problem gaming,” Gov. Kathy Hochul said in a statement.

In a statement, Polymarket’s Chief Legal Officer Neal Kumar asseverated, “We’ll fight for our users.”

“Polymarket was incubated in a minuscule New York City apartment and now boasts upwards of 350 employees here, epitomising precisely why people and businesses gravitate hither to make their fortunes.

We harbour unwavering faith in New York and we are remaining here,” Kumar said.

Prediction market platforms have contended that they function in a manner distinct from conventional gambling operations, inasmuch as consumers trade against one another, much as they do on stock markets.

They permit participants to buy and sell contracts tethered to the probable outcome of an event.

The platforms maintain that prices are determined by trading and that they exact a fee solely from that trading.

The Commodity Futures Trading Commission, which has set itself in opposition to state regulation of the platforms, did not immediately respond to a request for comment.