New York Attorney General Letitia James and Governor Kathy Hochul sued Polymarket’s US arm on Thursday, alleging the prediction market has been running an illegal gambling operation in the state without a license.
The suit targets QCX LLC, which does business as Polymarket US and launched in the United States in December 2025, letting users bet money on sporting events and other outcomes.
Triple Fines and Restitution Sought
The state argues those markets meet New York’s legal definition of gambling because their results are uncertain and outside the bettor’s control, and says the company never obtained a license from the New York State Gaming Commission or paid the taxes licensed operators owe.
The complaint also says Polymarket lets users aged 18 to 20 trade, while New York requires mobile sports bettors to be at least 21.
James is asking the court to halt Polymarket’s unlicensed gambling operations in New York, order it to forfeit all illegal gains and pay restitution to harmed users, and impose fines equal to three times those gains.
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” James said.
Hochul said Polymarket had knowingly violated state law and put New Yorkers at risk, particularly underage users most vulnerable to problem gambling.
“We’ll fight for our users,” Polymarket Chief Legal Officer Neal Kumar said in a statement reported by the Associated Press.
Kumar added that the company started in a small New York City apartment, now employs more than 350 people in the city and intends to stay.
Kalshi, Coinbase and Gemini Came First
The case follows the state’s lawsuit against Kalshi in July, which made the same unlicensed gambling and underage access arguments and was filed in Manhattan state court. James sued Coinbase and Gemini in April over their prediction market products.
Likewise, Baltimore separately sued both Kalshi and Polymarket on August 13, alleging they misled consumers about whether their products were legal and properly regulated.
The platforms argue that states have no authority over them because the Commodity Futures Trading Commission (CFTC) regulates them at the federal level. Kalshi has said its contracts are federally regulated derivatives, not gambling products subject to state gaming laws, and the CFTC has opposed state regulation of the sector.
Source: CryptoPotato
