New York Sues Polymarket, Claims It Operates Illegal Gambling

New York Takes Action Against Polymarket

New York Attorney General Letitia James and Governor Kathy Hochul have filed a lawsuit against Polymarket, claiming the platform operates as an unlicensed gambling site. The legal action, announced on Wednesday, targets QCX LLC, which runs Polymarket US, asserting that the platform allows users to place bets on unpredictable events, thus falling under New York’s gambling laws.

The state aims to halt Polymarket's operations within New York, demand the return of profits, reimburse users, and impose fines that could total three times the company's earnings from its alleged illegal activities. Investigations by the attorney general's office indicate that Polymarket poses significant financial risks to New Yorkers, particularly to those under the legal gambling age of 21.

"By bypassing New York's laws, Polymarket is exploiting the most vulnerable individuals and depriving New York families of essential services and support," James stated.

Polymarket, which launched in the U.S. in December 2025, allows users to bet on a wide range of events, claiming to cover "everything." The lawsuit highlights concerns over how the platform's operations undermine state regulations designed to protect consumers and ensure responsible gambling practices.

This legal challenge against Polymarket is part of a broader initiative by New York officials targeting prediction markets. Earlier this year, the state filed a $36 billion lawsuit against Kalshi for similar reasons. Additionally, legal actions have been taken against cryptocurrency exchanges Coinbase and Gemini regarding their prediction market services.

Prediction markets, which enable users to trade contracts based on real-world event outcomes, have seen significant growth, with analysts predicting trading volumes could reach $1 trillion by 2030. However, the evolving nature of these platforms has raised regulatory questions, particularly as they argue for federal oversight under the Commodity Futures Trading Commission (CFTC). Recent CFTC warnings about potential manipulations in certain event contracts add further complexity to the legal landscape.