New York sues Polymarket over alleged unlicensed gambling

Sources · 6 sources

1. CB

   Crypto Briefing@Crypto_BriefingPost on X · Sep 24

   ⚖️JUST IN: New York has sued Polymarket, accusing the prediction market platform of violating state gambling laws and allowing users under 21 to participate. Kalshi also faces allegations of running an unlicensed gambling business in New York. https://t.co/v1pcfLAmX5

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2. DE

   DecryptArticle · Sep 24

   New York Wants to Ban Polymarket, Lawsuit Calls It 'Illegal Gambling Operation' Attorney General Letitia James and Governor Kathy Hochul allege the prediction market operates without a license and exposes New Yorkers to gambling harms.

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3. CT

   Coin TelegraphArticle · Sep 24

   New York sues Polymarket over alleged illegal gambling business The action filed by state lawmakers followed a similar lawsuit against prediction markets company Kalshi in July that alleged the platform was running an illegal gambling operation.

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4. CR

   CryptoSlate@CryptoSlatePost on X · Sep 25

   New York wants a penalty equal to three times Polymarket’s gains from alleged illegal activity, plus $100,000 for each unauthorized sports-wagering offer or attempted offer. The state says Polymarket US lacks a New York gaming license and wants to stop unlicensed contracts spanning sports, elections and culture. Polymarket’s US venue is federally regulated by the CFTC. https://t.co/jWVUUJWZGJ

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5. CR

   CryptoSlateArticle · Sep 24

   New York sues Polymarket, seeks triple gains and $100,000 penalties over prediction markets New York has sued Polymarket, alleging its US prediction market is an unlicensed gambling business operating across the state. On Sept. 24, Attorney General Letitia James asked a New York state court to stop QCX LLC , which operates as Polymarket US, from offering event contracts without a state gaming license and to order restitution, disgorgement, and potentially substantial penalties. The petition covers contracts tied to sports, elections, culture, and other events. The action targets a company that is also regulated at the federal level. QCX has been a Commodity Futures Trading Commission (CFTC)-designated contract market since July 2025 , placing the lawsuit within a broader dispute over how federal derivatives oversight interacts with state gambling laws. New York says Polymarket contracts amount to gambling New York's case starts with the structure of Polymarket's contracts. Users buy contracts tied to the outcome of future events, with winning positions ultimately paying according to whether the specified event occurs. The state argues that because customers risk money on outcomes outside their control, the transactions meet New York's definition of gambling. The petition describes Polymarket as offering what is “quintessentially wagering” under the guise of event contracts and alleges that the company accepts public wagers despite having no license from the New York State Gaming Commission. Kathy Hochul, New York's Governor, said : “Calling it a ‘prediction market’ doesn’t change the facts. If you’re taking bets in New York, our gambling laws apply.” The state cited Polymarket's marketing in its case. The company announced its US app in December 2025 with “sports—followed by markets on everything” and advertised itself as “legal in all 50 states.” An earlier promotion said users would be able to “TRADE EVERY FOOTBALL GAME IN ALL 50 STATES.” Investigators said the platform offered markets involving the New York Mets, college football games, the New York governor's race and reality television show “Big Brother.” The petition also alleges Polymarket repeatedly advertised and solicited users located in New York through the internet and social media. Sports contracts add another layer to the state's case. New York requires mobile sports wagering operators to hold a state license, while Polymarket has none, according to the filing. The attorney general also alleges violations of the federal Wire Act through the transmission of sports wagers, information used to place them, and communications confirming payments across state lines. Age restrictions are also central to the complaint. Polymarket allows users aged 18 and above, while New York requires mobile sports bettors to be at least 21. The state is asking the court to prohibit Polymarket from allowing people under 21 to wager on the covered event contracts. James tied those requirements to New York's broader argument that unlicensed operators avoid safeguards and taxes imposed on licensed gaming companies. “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support,” James said. New York says gambling tax revenue supports schools, youth programs and treatment for problem gambling. Related Reading New York targets crypto with new $3.4B fines as perpetual futures turn prediction apps into nonstop leverage casinos State seeks triple gains and $100,000 penalties The remedies sought by New York extend beyond shutting down Polymarket's sports contracts. James wants a permanent injunction preventing the company from operating an unlicensed gambling business within or from New York, including by offering contracts tied to “sports, culture, elections, and other events” without obtaining the required state licenses. The requested order would also cover advertising, marketing, and soliciting participation in those contracts. That wording would place political and cultural markets alongside sports contracts under the same requested restrictions rather than confining the case to products that resemble conventional sportsbook wagers. New York also wants Polymarket to provide an accounting that identifies its customers and itemizes bets placed, customer losses, and gains the company received. It is seeking full restitution for customers, damages, and disgorgement of money obtained through the alleged violations. The state is also seeking a penalty equal to three times Polymarket's gains from the alleged illegal activity. Sports wagering carries a separate potential cost. The petition seeks $100,000 for each offering or attempt to offer unauthorized sports wagering or mobile sports wagering within or from New York. It does not specify how many offers could ultimately qualify, leaving the size of that portion of any potential penalty unresolved. The attorney general alleges Polymarket has operated or indirectly operated a sports wagering platform in New York since at least Jan. 23, 2025, and has continued to advertise it to people in the state. Polymarket becomes latest target of New York prediction-market push The lawsuit follows a series of similar actions by New York against companies offering event contracts under prediction-market structures. James sued Coinbase Financial Markets and Gemini Titan in April, alleging their prediction markets constituted unlicensed gambling because customers could bet on sports, elections and entertainment events. Those cases also sought forfeiture of alleged illegal profits, restitution and fines equal to three times the companies' profits from the challenged activity. New York followed in July with a lawsuit against Kalshi, another CFTC-designated contract market. That petition similarly sought to stop Kalshi from operating an unlicensed gambling business, recover alleged illegal gains, compensate users and impose fines equal to three times its gains. The Kalshi dispute had already tested the boundary between federal derivatives regulation and state gambling enforcement. Earlier in July, James and Hochul said Kalshi had lost a lawsuit against the New York Gaming Commission and pledged to continue applying state gambling laws to prediction markets. The Polymarket petition now asks the same state court system for a comparable package of relief, while adding allegations tied to Polymarket's own sports promotions and New York activity. The post New York sues Polymarket, seeks triple gains and $100,000 penalties over prediction markets appeared first on CryptoSlate .

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6. UN

   UnchainedArticle · Sep 25

   New York Sues Polymarket Over Alleged Illegal Gambling, and Polymarket Sues Back New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit on Thursday alleging that Polymarket ‘s U.S. prediction market is an unlicensed gambling operation. Polymarket answered the same day by moving the case to federal court and suing state officials, CNBC reported . The state’s petition , filed in New York State Supreme Court in Manhattan against QCX LLC, which does business as Polymarket US, argues that each event contract is a bet under state law. It says the New York State Gaming Commission has not licensed the company “in any capacity.” “Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” James said in the announcement. What New York Is Asking For The state wants a court to permanently bar Polymarket from operating in New York without a license and to order an accounting of bets and customer losses, restitution, disgorgement, a penalty of three times its gains and $100,000 for each unauthorized offer of sports wagering. The petition says the platform lets 18- to 20-year-olds trade although New York sets 21 as the minimum age for mobile sports betting. It also cites contracts on games involving New York college teams, such as a Sept. 3 football game between Buffalo and Albany, which even licensed sportsbooks in the state may not offer. Other examples include markets on the New York governor’s race and on eliminations from the reality show Big Brother. The state also alleges violations of the federal Wire Act . Polymarket Sues Back Polymarket’s federal suit against James and New York State Gaming Commission officials argues that states cannot regulate its event contracts, which it treats as swaps, according to CNBC. The suit said it seeks to “prevent imminent and irreparable harm arising from New York’s enforcement of state gambling laws against federally regulated derivatives exchanges” and called the state’s position an “erroneous theory,” CNBC reported. “While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users,” Polymarket Chief Legal Officer Neal Kumar said in a statement quoted by CNBC. “We believe in New York and we’re staying here.” A Growing Fight Over Jurisdiction The case follows New York’s July lawsuit against Kalshi and its April action against Coinbase and Gemini, which it said ran illegal gambling platforms. The CFTC has sued New York and other states over limits on sports event contracts, and New Jersey asked the Supreme Court this month to decide whether states can regulate those contracts when they trade on CFTC-registered exchanges. Related Listen: CME vs. Kalshi. Is Washington Picking a Winner in Prediction Markets? The post New York Sues Polymarket Over Alleged Illegal Gambling, and Polymarket Sues Back appeared first on Unchained .

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