New York Files Lawsuit Against Polymarket for Illegal Gambling

New York Attorney General Letitia James and Governor Kathy Hochul have filed a lawsuit against QCX LLC, operating as Polymarket US, accusing it of running an unlicensed gambling business. The lawsuit claims that Polymarket's prediction markets qualify as gambling under New York law, as users bet on uncertain outcomes beyond their control. Polymarket, which launched in the U.S. in December 2025, allows users to wager on various events, including sports. The investigation revealed that the platform poses significant financial risks to New Yorkers, particularly those under 21. The state seeks a court order to prohibit Polymarket's operations in New York, require it to forfeit its earnings, pay restitution to users, and impose fines triple its alleged profits. Officials argue that Polymarket has avoided necessary licensing and taxes that regulated casinos and sportsbooks must pay. The prediction market sector has grown significantly, with companies like Polymarket and Kalshi reaching multi-billion-dollar valuations. New York's lawsuit follows previous actions against Kalshi and crypto exchanges Coinbase and Gemini, amid a broader crackdown on prediction markets across several states.

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