New York Sues Polymarket Over Unlicensed Gambling Operation

New York Attorney General Letitia James and Governor Kathy Hochul sued Polymarket US on September 24, alleging the prediction market platform has been running an illegal, unlicensed gambling operation in the state. In a press release announcing the lawsuit, the Office of the Attorney General said its investigation found Polymarket’s markets meet New York’s legal definition of gambling because users wager money on outcomes they cannot control. The state is asking a New York County court to bar the platform from operating as an unlicensed gambling business, forfeit all illegal gains, pay restitution to users, and pay fines equal to three times its gains.

No license, unpaid taxes and under-21 access

The complaint targets QCX LLC, which does business as Polymarket US and launched its American platform in December 2025 with a promise of “sports, followed by markets on everything.” New York says the company never obtained a license from the New York State Gaming Commission, allowing it to sidestep taxes that licensed casinos and mobile sportsbook operators must pay, revenue the state says funds public schools, youth sports programs and problem-gambling treatment. The suit also alleges Polymarket lets users aged 18 to 20 place bets even though state law sets a minimum age of 21 for mobile sports betting.

“Targeting the most vulnerable”

James said the state’s gambling laws exist to protect New Yorkers and fund public programs, adding that “by skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support.” Hochul said the company “put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming.” The filing is the latest in an enforcement campaign that has already produced lawsuits against rival prediction market Kalshi in July and against Coinbase and Gemini in April.

A federal fight is now in play

Polymarket chief legal officer Neal Kumar said the company was “founded in a tiny NYC apartment and now has more than 350 employees here” and that it will “fight for our users,” describing the filing as a recycled lawsuit. Polymarket argues its markets are federally regulated event contracts under the Commodity Futures Trading Commission, not gambling. That dispute is now before a divided set of federal appeals courts and a case New Jersey has asked the Supreme Court to take up. Polymarket US operates through QCX, a CFTC-licensed firm it acquired, and recently launched perpetual trading with up to 20x leverage. The suit follows a similar confrontation France escalated in July, when regulators ordered internet providers to block Polymarket.