New York on Thursday sued Polymarket, accusing the company of running an illegal gambling operation that skirts around industry regulations in the latest challenge against prediction markets.

The lawsuit, brought by Attorney General Letitia James, comes nearly two months after a similar lawsuit against prediction market Kalshi. The complaints allege that the markets – which allow users to bet on everything from sports and pop culture to political events – are simply a loophole to avoid the regulations and taxes associated with licensed gambling platforms.

“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” James said in a statement Thursday.

“By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support.”

James is asking the court to force Polymarket to forfeit illegal gains, pay restitution and pay fines equal to three times the profits it reaped through its illicit actions. New York Gov. Kathy Hochul is also supporting the suit.

The attorney general’s office did not immediately respond to The Post’s request for comment.