New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit Wednesday against Polymarket, alleging the prediction market operates as an unlicensed gambling business in violation of state law.
The suit, filed against QCX LLC doing business as Polymarket US, contends that the platform's markets meet New York's legal definition of gambling because users bet money on uncertain outcomes outside their control. The state's investigation found the platform exposes New Yorkers, including those under the legal gambling age of 21, to financial and personal risk.
Polymarket launched in the U.S. in December 2025 and offers wagers on sporting events and other outcomes. Officials said the company circumvented licensing requirements and avoided the taxes that regulated casinos and mobile sportsbooks pay.
"By skirting New York's laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support," James said in a statement, noting that gambling laws fund educational and public benefit programs. Hochul emphasized that Polymarket had "put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming."
The state is seeking a court order to bar Polymarket from operating in New York, force forfeiture of its gains, require restitution to users, and impose fines equal to three times the platform's earnings from the alleged conduct.
How prediction markets work: Prediction markets allow users to buy and sell contracts tied to real-world event outcomes, from elections to sporting results. Each contract resolves to a fixed value when the event concludes, typically settling at $1 if the outcome occurs and $0 if it doesn't. A contract's live price reflects an implied probability of the event occurring.
This action extends New York's broader campaign against prediction markets. In July, James and Hochul sued rival Kalshi, with the attorney general seeking $36 billion over similar allegations of illegal gambling. The state also sued Coinbase and Gemini in April over their prediction offerings, part of enforcement actions spanning Kentucky, Illinois, and other states.
The platforms have generally argued they operate as federally regulated venues under the Commodity Futures Trading Commission, presenting a jurisdictional dispute that has drawn attention from the Trump administration, which has sided with the industry. The CFTC itself has expressed concern about certain contract types, with staff recently warning that "mention" contracts invite manipulation.
