New York Sues Polymarket, Seeks to Halt Alleged Unlicensed Gambling Operations

New York state has sued prediction-market platform Polymarket, alleging it offered gambling services without state approval and asking a court to halt its operations in the state.

According to the New York Attorney General’s Office on September 24, Attorney General Letitia James and Governor Kathy Hochul filed suit against QCX LLC, which operates PolymarketUS. State officials argue that Polymarket’s prediction-market contracts qualify as gambling under state law and therefore require approval from the New York State Gaming Commission.

James said Polymarket was skirting New York law while targeting vulnerable people, adding that the state would not hesitate to take the steps needed to protect New Yorkers and enforce the law. Hochul also argued that the company’s unlicensed operations exposed users under 21, the state’s legal gambling age, to risk.

State officials also contend that Polymarket avoided taxes imposed on regulated gambling operators. The attorney general’s office said that tax revenue is used to support public schools, youth sports, and gambling addiction prevention and treatment programs.

The state is seeking sweeping relief in the lawsuit. New York asked the court to order Polymarket to halt unlicensed operations in the state, including advertising, until it secures formal approval. It is also seeking fines, forfeiture of illegal profits, and restitution for users. The Block reported that New York is also seeking a fine of at least $100,000.

The lawsuit comes as tensions persist between state and federal authorities over who has the power to regulate prediction markets. New York also sued rival platform Kalshi in July for similar reasons. Other states, including Massachusetts and Rhode Island, have also taken legal action against Kalshi and Polymarket.

Polymarket said it plans to continue operating in New York. Neil Kumar, the company’s chief legal officer, said Polymarket started in a small apartment in New York and now employs more than 350 people there. The company believes in New York and intends to stay, he said. Kumar added that Polymarket has been working with state officials to address the concerns raised.