New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit against QCX LLC, operating as Polymarket US, for allegedly running an illegal gambling operation in New York. The lawsuit claims that Polymarket's platform, launched in the United States in December 2025, allows users to bet money on event outcomes, such as sports and other events, which the Attorney General's office considers illegal, unlicensed gambling. The OAG's investigation found that Polymarket operates without a necessary license from the New York State Gaming Commission, sidestepping tax obligations that licensed casinos and mobile sports gambling platforms fulfill, which typically fund public services like schools and problem gambling programs.
The lawsuit alleges that Polymarket's prediction markets meet the legal definition of gambling because the outcomes are uncertain and beyond the control of the bettor. Furthermore, the platform is reportedly accessible to users between the ages of 18 and 20, despite New York law requiring participants in mobile sports betting to be at least 21 years old. Authorities highlighted the potential for serious personal and financial risks, particularly for younger individuals, citing studies that link early gambling exposure to depression, anxiety, and financial stress, with a significant percentage of those with gambling disorders experiencing suicidal ideation.
Attorney General James is seeking a court order to halt Polymarket's operations as an unlicensed gambling business, requiring the company to forfeit all illegal gains, pay restitution to affected consumers, and incur fines equal to three times the profits derived from its illicit activities. This action is part of a broader effort by New York to crack down on prediction markets, following similar lawsuits against Kalshi in July 2026, and against Coinbase Financial Markets and Gemini Titan in April 2026. The state argues that these platforms exploit loopholes to avoid regulations and taxes associated with licensed gambling.
