New York sues Polymarket over alleged illegal gambling
New York has sued Polymarket, accusing the prediction market platform of running an unlicensed gambling operation and allowing users below the state’s legal age for mobile sports betting to place wagers. Polymarket followed with a countersuit seeking to block state officials from regulating its platform.
Attorney General Letitia James and Governor Kathy Hochul announced the lawsuit on Thursday against QCX LLC, which operates as Polymarket US. James’s office said the platform launched in the United States in December 2025 with sports betting and promised to expand to “markets on everything.”
The lawsuit argues that Polymarket’s markets qualify as gambling because users wager money on outcomes that are uncertain, beyond their control or dependent on a game of chance. The company has not obtained a license from the New York State Gaming Commission, according to the attorney general’s office.
Prosecutors also found that the platform allows users ages 18 to 20 to participate, while New York requires people to be at least 21 to place mobile sports bets. The state alleges that this exposes younger users to financial harm and problem gambling.
“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.
The state also accuses Polymarket of avoiding taxes paid by licensed gambling businesses.
James is seeking a court order blocking Polymarket from operating as an unlicensed gambling business in New York, requiring it to forfeit gains from the alleged illegal activity and pay restitution to harmed consumers. The lawsuit also seeks fines equal to three times those gains.
In a statement to PYMNTS, Polymarket Chief Legal Officer Neal Kumar said the company had tried to address the state’s concerns directly.
“While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users,” Kumar said. “We didn’t run to preemptively sue the state. We chose to engage with them directly on the substance and address their concerns. They preferred the media hit.”
Polymarket filed its own lawsuit against James and other state officials in Manhattan federal court on Thursday evening, seeking to block them from regulating its prediction market, Reuters reported.
“Any time the AG’s office wants to swing by, our door is open for a conversation about how we protect consumers and offer fair, transparent and legal markets,” Kumar told PYMNTS.
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Ella Rae Greene, Editor In Chief
