New York sues Polymarket, seeking triple gains and $100,000 penalties per violation
New York files lawsuit against Polymarket
New York has filed a lawsuit against Polymarket, alleging that its US operations function as an unlicensed gambling business. On September 24, 2026, Attorney General Letitia James asked a state court to stop QCX LLC, the entity operating Polymarket US, from offering event contracts without a gaming license.
The legal action seeks to block the platform from offering contracts related to sports, elections, and cultural events. The state is requesting restitution for users, the return of profits made by the company, and significant financial penalties.
Core allegations of illegal wagering
- The state argues that buying contracts on future events where users risk money constitutes gambling under New York law.
- Polymarket allegedly lacks a license from the New York State Gaming Commission despite accepting public wagers.
- The platform allows users aged 18 and older, while New York law requires mobile sports bettors to be at least 21.
- Investigators claim the company advertised its services to New York residents via the internet and social media.
Conflict between state and federal oversight
The lawsuit highlights a regulatory clash. QCX has been designated as a contract market by the federal Commodity Futures Trading Commission (CFTC) since July 2025. This status places the company under federal derivatives oversight, yet New York asserts that state gambling laws still apply to its activities within the state borders.
Governor Kathy Hochul stated that labeling the activity a "prediction market" does not exempt it from gambling regulations. She emphasized that if bets are taken in New York, state laws govern the transaction.
Specific penalties sought by the state
New York is requesting a permanent injunction to prevent Polymarket from operating an unlicensed gambling business in the state. The state also demands a detailed accounting of customer bets, losses, and gains.
Financially, the petition seeks:
- Full restitution for customers.
- Disgorgement of all money obtained through alleged violations.
- A penalty equal to three times the company's gains from the illegal activity.
- A fine of $100,000 for each instance of unauthorized sports wagering offered within or from New York.
Part of a wider enforcement trend
This lawsuit is part of a broader campaign by New York against prediction markets. The state previously took similar legal action against Coinbase Financial Markets and Gemini Titan in April. The filing notes that Polymarket has allegedly operated or indirectly operated a sports wagering platform in New York since at least January 23, 2025.
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