New York Accuses Polymarket of Operating an Illegal Gambling Platform

New York has filed a lawsuit against Polymarket’s U.S. business, claiming the prediction market operator is conducting gambling activities in the state without a required license.

Attorney General Letitia James and Governor Kathy Hochul brought the case Thursday against QCX LLC, which operates under the Polymarket US name. The state is asking a court to prevent the company from operating in New York unless it secures a gambling license.

The lawsuit also seeks the recovery of proceeds that New York alleges were generated unlawfully. In addition, officials are requesting restitution for customers and financial penalties equivalent to three times the alleged gains.

Polymarket launched its U.S. platform in December 2025, initially offering markets tied to sporting event results. The company said when it launched that it planned to add other types of prediction markets.

New York says the contracts meet the state’s definition of gambling because customers place money at risk based on uncertain outcomes. The state also alleges that Polymarket allows users aged 18, 19 and 20 to participate, while New York law requires customers to be at least 21 for mobile sports betting.

Polymarket did not immediately respond to a request for comment.

The lawsuit comes as prediction market platforms face an ongoing jurisdictional dispute with state gambling regulators. At issue is whether event contracts should be treated as federally regulated financial products or as gambling products subject to state laws.

Prediction market operators have argued that the contracts fall under the authority of the Commodity Futures Trading Commission (CFTC). State regulators have taken a different position, especially for sports-related markets, arguing that such contracts function as bets and therefore must comply with state gambling requirements.

New York has also challenged Kalshi as part of the dispute. The state sued the company in July after negotiations with Hochul’s office broke down, seeking up to $36 billion in penalties and disgorgement. Several related disputes have reached appeals courts, while Kalshi’s case against New Jersey has been appealed to the U.S. Supreme Court.

James said New York’s gambling laws are intended to protect residents, address the risks associated with problem gambling and support funding for education and other public programs.

The lawsuit was filed less than a year after Polymarket resumed operations in the U.S.