New York sues Polymarket over alleged unlicensed gambling operations
The state seeks to halt Polymarket’s activities without a gambling license and reclaim purportedly illicit profits.
— On Thursday, New York filed a lawsuit against Polymarket, accusing the prediction market platform of operating an unlicensed gambling business within the state.
— The state aims to prevent Polymarket from functioning without a gambling license and is demanding restitution, forfeiture of alleged illegal earnings, and financial penalties.
— The case is part of a broader debate on whether prediction markets should be federally regulated by the CFTC or subject to state gambling laws.
New York Attorney General Letitia James and Governor Kathy Hochul sued Polymarket’s U.S. entity, QCX LLC, on Thursday, alleging the platform runs an illegal gambling operation in the state.
The lawsuit, filed against QCX LLC (doing business as Polymarket US), asks a court to stop the company from operating in New York without a gambling license. The state also demands that Polymarket forfeit what it claims are illegally earned profits, pay restitution to customers, and face fines equal to three times those profits.
Polymarket launched its U.S. platform in December 2025, offering markets where users could wager money on the outcomes of sporting events. At the time, the company said it planned to expand into other types of markets.
New York argued that these contracts constitute gambling under state law because users are betting money on events with uncertain outcomes. The state also noted that Polymarket allows users aged 18 to 20 to use the platform, while New York requires users to be at least 21 to participate in mobile sports betting.
A Polymarket spokesperson did not immediately respond to a request for comment.
The case adds to a growing conflict between prediction markets and state gambling regulators over who has the authority to oversee these products.
Prediction market companies argue that their event contracts are financial products overseen at the federal level by the Commodity Futures Trading Commission (CFTC). States have taken a different view, especially when the contracts involve sports, arguing that the products are effectively bets and must comply with state gambling rules.
New York has been one of the most active states in this fight. The state sued Kalshi in July after negotiations between the company and Hochul’s office broke down, seeking up to $36 billion in penalties and disgorgement. Many of these court cases have proceeded to appeals courts, and a recent case between Kalshi and New Jersey has been appealed to the U.S. Supreme Court.
“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.
The lawsuit comes less than a year after Polymarket returned to the U.S. market.
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Why it matters:
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