New York sues Polymarket, calling prediction market an illegal gambling operation
New York Attorney General Letitia James and Governor Kathy Hochul have sued Polymarket's US arm, accusing it of running an unlicensed gambling operation and asking a court to block it from operating in the state.
New York has sued the US arm of prediction market platform Polymarket, accusing it of operating as an illegal gambling business in the state.
Attorney General Letitia James and Governor Kathy Hochul announced the lawsuit on 24 September, filing against QCX LLC d/b/a Polymarket US in a Manhattan state court. The state’s petition says Polymarket’s event contracts — which let users wager on sports, elections and cultural events — meet New York’s definition of gambling and therefore require a licence from the New York State Gaming Commission. It accuses the company of encouraging problem gambling, particularly among people under 21, and seeks civil fines, the forfeiture of illegal gains and full restitution to customers.
“By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming,” Hochul said in a statement.
Polymarket’s chief legal officer Neal Kumar said the company was disappointed. “We chose to engage with them directly on the substance and address their concerns,” he said. “They preferred the media hit. Any time the [attorney general’s] office wants to swing by, our door is open.”
The case is New York’s latest move against prediction markets, following a similar suit against rival Kalshi in July and petitions against operators run by Coinbase and Gemini in April. It comes as a wider dispute intensifies over whether prediction markets should be regulated by the states or the federal government, with CFTC Chair Michael Selig asserting the agency has “exclusive jurisdiction” and New Jersey petitioning the US Supreme Court over its own case against Kalshi.
Sources
- Reuters (via WIXX): https://wixx.com/2026/09/24/new-york-sues-polymarket-says-it-ran-illegal-gambling-operation/
- New York Attorney General (press release): https://ag.ny.gov/press-release/2026/attorney-general-james-and-governor-hochul-announce-lawsuit-against-polymarket
- New York Post: https://nypost.com/2026/09/24/business/new-york-sues-polymarket-accuses-company-of-running-illegal-gambling-operation/
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