New York sues Polymarket, alleging illegal gambling operation
New York sues Polymarket over alleged unlicensed gambling
New York Attorney General Letitia James and Governor Kathy Hochul sued prediction market platform Polymarket's U.S. business on Thursday, alleging the company is running an illegal gambling operation in the state.
The lawsuit was filed against QCX LLC, which does business as Polymarket US. The state asks a court to stop the company from operating in New York without a gambling license.
A prediction market is a platform where users put money on the outcome of future events. Polymarket launched its U.S. platform in December 2025 with markets tied to the results of sporting events, and said at the time it planned to expand into other types of markets.
What New York is asking the court to do
- Block Polymarket from operating in New York without a gambling license.
- Make the company give up what the state says are illegally earned gains.
- Pay restitution to customers, meaning money paid back to them.
- Pay fines equal to three times those alleged gains.
- The state says the contracts amount to gambling under New York law because users are putting money on events with uncertain outcomes.
- New York also says Polymarket lets people aged 18 to 20 use the platform, while the state requires users to be at least 21 for mobile sports betting.
- A Polymarket spokesperson did not immediately return a request for comment.
What the attorney general said about the case
James said in a statement: "Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs."
The legal action is a petition filed against QCX LLC over the Polymarket US business.
A wider fight over who regulates prediction markets
Prediction market companies argue their event contracts are financial products overseen at the federal level by the Commodity Futures Trading Commission (CFTC). States take a different view, especially when the contracts involve sports. They argue the products are effectively bets and must follow state gambling rules.
New York has been one of the most active states in that dispute. The state sued Kalshi in July after negotiations between the company and Hochul's office broke down, seeking as much as $36 billion in penalties and disgorgement, which means giving up money earned.
Many of these court cases have gone to appeals courts, and a recent case between Kalshi and New Jersey has been appealed to the U.S. Supreme Court.
What is confirmed
- The lawsuit against QCX LLC, doing business as Polymarket US, was filed Thursday by James and Hochul.
- New York is seeking a court order to stop the company operating without a gambling license, plus restitution for customers, forfeiture of alleged illegal gains and fines of three times those gains.
- Polymarket launched its U.S. platform in December 2025 with sports markets.
- Polymarket did not immediately respond to a request for comment.
What is still unclear
The supplied report does not include a response from Polymarket, so the company's position on the allegations is not known from the material available.
It is also not known how the court will decide whether the contracts count as gambling under New York law, and the source does not give a date for a hearing or any timeline for the case.
Why this matters
If New York's request succeeds, Polymarket could be blocked from operating in the state unless it obtains a gambling license, and would have to give up what the state calls illegal gains and pay penalties.
The case also adds to a growing fight between prediction market companies and state gambling regulators over who has the authority to oversee these products.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.