New York Sues Polymarket Over Alleged Unlicensed Gambling Operation

New York State sues Polymarket over allegations of unlicensed gambling and exposing

New York State has sued Polymarket, alleging that the prediction-market platform is operating an unlicensed gambling business and allowing people under 21 to participate in markets that involve financial risk.

The lawsuit was announced on September 24 by New York Attorney General Letitia James and Governor Kathy Hochul. CoinMarketCap reported the development in a post on X, describing the state's allegations that Polymarket's prediction markets constitute illegal gambling and expose underage users to potential financial harm.

New York Challenges Polymarket's Prediction Markets

The case was filed against QCX LLC, doing business as Polymarket US. According to the New York Attorney General's Office, Polymarket launched in the United States in December 2025 as a service allowing users to wager money on the outcomes of sporting events, with plans to offer markets covering a broader range of events.

New York's lawsuit alleges that the platform's prediction markets meet the state's legal definition of gambling because the outcomes are uncertain and outside the control of bettors or depend on chance.

The state further alleges that Polymarket has not obtained a license from the New York State Gaming Commission. Regulators argue that operating without such a license allows the company to avoid requirements that apply to licensed gambling businesses, including taxes associated with regulated gambling activity.

Dispute Over Users Under 21

A central issue in the lawsuit is access for users between 18 and 20 years old.

The New York Attorney General's Office says Polymarket's prediction markets are available to users in that age group, while New York law requires individuals to be at least 21 to participate in mobile sports betting. The state argues that allowing younger users to access the markets exposes them to personal and financial risks associated with gambling.

The allegation places Polymarket within a broader dispute over how prediction markets should be classified under state gambling laws. New York has previously taken legal action against other companies offering prediction markets, including Kalshi, Coinbase and Gemini.

State Seeks Fines and Restitution

New York is asking a court to prevent Polymarket from operating as an unlicensed gambling business in the state. The lawsuit also seeks financial penalties, forfeiture of alleged illegal gains and restitution for consumers who were harmed.

The case does not establish the state's allegations as final findings. Polymarket will have the opportunity to respond to the claims through the legal process, while the court will determine how the dispute proceeds.

The lawsuit marks another legal challenge to prediction-market platforms as authorities examine whether contracts tied to future events fall under existing gambling regulations. For Polymarket, the immediate issue is whether its U.S. prediction-market operation can continue serving New York users under the state's existing licensing framework.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.