New York’s attorney general sued Polymarket on Thursday, escalating her battle against prediction markets, an industry that she says ‌violates state laws against illegal gambling.

Attorney General Letitia James filed her petition in a state court in Manhattan, two months after bringing a similar case against rival Kalshi.

All were accused of operating without obtaining required licenses from ​the New York State Gaming Commission. They were also accused of encouraging problem gambling, particularly among people under age 21, and ​endangering people’s financial, emotional and physical health.

“By running an unlicensed gambling operation, Polymarket has done more than just ⁠knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming,” New York ​Governor Kathy Hochul said in a statement.

New York is seeking civil fines, the forfeiture of illegal gains, and full restitution to customers.

Prediction markets are ​best known for letting people wager through so-called event contracts on the outcomes of sports, though people can also wager on elections and cultural events such as the Oscars.

Polymarket expressed disappointment that state officials decided to sue.

“We chose to engage with them directly on the substance and address their concerns,” Chief Legal Officer Neal ​Kumar said in a statement. “They preferred the media hit. Any time the (attorney general’s) office wants to swing by, our door is open for a ​conversation about how we protect consumers and offer fair, transparent and legal markets.”

The case against Polymarket is the latest effort by US states ‌to crack ⁠down on an industry that has soared in popularity since faring better than pollsters in predicting that Republican Donald Trump would beat Democrat Kamala Harris in the 2024 presidential election.