Polymarket, the crypto-enabled prediction market, has been hit with a major nationwide class action lawsuit in the U.S. District Court for the Southern District of New York (SDNY).

The lawsuit, filed by plaintiff Lorenzo Miro on behalf of a proposed nationwide class, alleges that Polymarket is operating an “illegal online sports gambling platform.”

The filing argues that while the platform is marketed as a sophisticated “prediction market” for price discovery, it is, in reality, an unlicensed sports betting enterprise that violates various state laws.

The legal challenge comes at a time when prediction markets have surged into the mainstream. In January, the Tennessee Sports Wagering Council ordered Polymarket to stop offering sports contracts, void existing trades, and refund users by January 31.