The state aims to halt Polymarket’s operations without a gambling license and seeks to recover alleged illegal profits.
By Helene Braun|Edited by Nikhilesh De18 minutes ago2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Polymarket founder and CEO Shayne Coplan (Eugene Gologursky/Getty Images for The New York Times)SummaryShow- New York has initiated a lawsuit against Polymarket, claiming the prediction market operates an unlicensed gambling enterprise in the state.
- The state seeks to prevent Polymarket from functioning without a gambling license, demand restitution, and impose financial penalties for alleged illegal profits.
- This case highlights the ongoing debate over whether prediction markets should be federally regulated by the Commodity Futures Trading Commission (CFTC) or governed by state gambling laws.
On Thursday, New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against Polymarket’s U.S. operations, asserting that the platform is engaging in illegal gambling activities within the state.
The lawsuit, targeting QCX LLC, which operates as Polymarket US, requests a court order to prevent the company from conducting business in New York without the necessary gambling license. Additionally, the state is pursuing the recovery of what it claims are illegally obtained profits, restitution for customers, and fines amounting to three times those profits.
Polymarket introduced its U.S. platform in December 2025, offering markets for users to wager on sporting event outcomes. The firm indicated intentions to broaden its market offerings.
According to New York officials, these contracts qualify as gambling under state law due to the uncertainty surrounding the outcomes. They also noted that Polymarket permits users aged 18 to 20 to participate, while state regulations require participants in mobile sports betting to be at least 21 years old.
A representative from Polymarket did not respond immediately to requests for comment.
The lawsuit is part of a larger conflict between prediction markets and state gambling regulators regarding who should oversee these types of products.
Companies in the prediction market sector contend that their event contracts are financial instruments regulated at the federal level by the CFTC. In contrast, states have adopted a different perspective, particularly concerning contracts linked to sports, viewing them as bets that must comply with state gambling regulations.
New York has been actively involved in this regulatory battle. The state previously sued Kalshi in July after discussions with the company and Hochul's office failed, seeking up to $36 billion in penalties and the return of profits. Many of these legal disputes have progressed to appeals courts, including a recent case involving Kalshi that has been escalated to the U.S. Supreme Court.
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” stated James.
This lawsuit follows less than a year after Polymarket re-entered the U.S. market.
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