A New York man has filed a proposed class action lawsuit in federal court accusing the operators of the Polymarket website of running an illegal online sports gambling platform while presenting it as a lawful “prediction market.”

The complaint, filed February 4 in the U.S. District Court for the Southern District of New York, was brought by Lorenzo Miro San Diego. He says he is suing on his own behalf and on behalf of others who used the platform. The defendants named in the case are Blockratize, Inc., doing business as Polymarket, Adventure One QSS, Inc., doing business as Polymarket.com, and QCX LLC, doing business as Polymarket US.

San Diego is asking the court to allow the case to move forward as a class action and has requested a jury trial. While the filing does not yet lay out specific damages, it seeks relief for San Diego and a proposed class of similarly situated users.

At its core, the lawsuit argues that Polymarket is not what it claims to be. The complaint says the site is marketed as a “prediction market,” but in practice functions as an unlicensed sports betting operation that runs afoul of state gambling laws.

Claims focus on prediction markets versus sports betting

In a section titled “Nature of the Case,” the complaint says the dispute stems from the defendants’ operation of an online platform that lets users wager on the outcomes of sporting events and other real-world events. The plaintiff argues that this activity is illegal sports gambling, not lawful prediction market participation.

According to the filing,...