Charleston attorney sues DraftKings and Polymarket over South Carolina gambling ban
A Charleston, South Carolina attorney filed suit against DraftKings and Polymarket on July 29, alleging their sports event contracts violate the state's anti-gambling laws. The complaint, brought by Jame M. Hughes of Motley Rice, also names Robinhood Markets, CME, and Crypto.com Derivatives North America as defendants. Hughes is himself a state resident who has never traded prediction markets. The suit challenges the platforms' use of the 'event contracts' label, arguing it does not change the underlying gambling nature of the activity. The filing invokes a centuries-old state statute.
Private plaintiff suits add an uncontrollable second front that prediction market operators cannot manage through federal regulatory channels. DraftKings and Polymarket now face parallel actions in South Carolina and California from individual litigents, separate from state attorney general enforcement in New York, Michigan, Wisconsin, and Washington.
A class-action template would invite copycat filings in every state with similar gambling bans. The platforms must defend product design against both contract-market and gambling-law characterizations simultaneously. CFTC registration offers no shield against state-court gambling claims. The first verdict will set the damages model that shapes settlement calculus across the industry.
Becomes the second private-plaintiff suit against CFTC-registered prediction markets in two days, after a California user sued over sports predictions as illegal gambling, confirming that individual litigants and state attorneys general are now operating on parallel tracks.