"Not Gambling, It’s Finance"... Polymarket Enters Legal Battle With Massachusetts
"Not Gambling, It’s Finance"... Polymarket Enters Legal Battle With Massachusetts
Polymarket, the world’s largest cryptocurrency-based prediction market platform, has launched an all-out legal battle to defend its market leadership by filing a lawsuit in federal court against regulatory pressure from the U.S. government.
On February 10 local time, Polymarket filed a federal lawsuit against Massachusetts Attorney General Andrea Campbell and the state’s gaming regulators. The company argues that the state government’s efforts to restrict platform operations and block user access violate federal law, and it has asked the court to halt regulatory actions by state authorities.
At the heart of the legal dispute is the question of jurisdiction over prediction markets. Polymarket stresses that oversight of prediction markets should fall under the federal Commodity Futures Trading Commission (CFTC), not under state gambling laws. Polymarket Chief Legal Officer Neal Kumar stated that Congress granted exclusive authority over event contracts to the CFTC rather than state governments, adding that core issues affecting a nationwide market must be resolved in federal court.
Polymarket warned that state-level regulatory actions could undermine the stability of the national market and cause irreparable harm. According to the company, sanctions or restrictions by individual states would interfere with legally authorized operations, fragment nationwide markets, reduce liquidity, strain banking and business partnerships, and ultimately erode user trust. Polymarket emphasized that immediate judicial intervention is essential to protect the federal market structure and the rights of users across the country.
The lawsuit comes amid heightened scrutiny of prediction markets across the United States. Last month, Polymarket, Kalshi, and Crypto.com were ordered by the Tennessee Sports Wagering Council to halt the offering of sports betting-related contracts. Kalshi also sought a stay of enforcement against a ban on sports prediction markets, but the court denied the request, leaving the company facing a class-action lawsuit over allegations of operating an unregistered sports betting platform. Cryptocurrency exchange Coinbase is likewise pursuing similar lawsuits challenging the regulatory authority of states such as Michigan and Illinois over prediction markets.
Prediction market platforms argue that state intervention is stifling the growth of innovative financial products and fragmenting markets, and they are calling for unified federal regulatory standards. The outcome of the lawsuit against Massachusetts is expected to have a significant impact on future regulatory actions by other states and could serve as a pivotal milestone in determining whether prediction markets are recognized as federally regulated financial products rather than simple gambling. The cryptocurrency industry is watching closely, hoping that Polymarket’s legal challenge will help resolve regulatory uncertainty and solidify the market’s legitimate status.
*Disclaimer: This article is for investment reference only, and no responsibility is assumed for any investment losses based on its content. The information provided should be interpreted solely for informational purposes.*
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