TLDR
- New York sued Polymarket on September 24, claiming it runs an unlicensed gambling business in the state.
- The state wants penalties equal to three times Polymarket’s gains, plus $100,000 for each unauthorized sports wagering offer.
- New York says Polymarket allows users aged 18 and older, while state law requires mobile sports bettors to be 21.
- The lawsuit follows earlier New York cases against Coinbase Financial Markets, Gemini Titan and Kalshi.
- Federal courts are split on state versus federal authority, and petitions are now before the Supreme Court.
New York has filed a lawsuit against prediction market Polymarket. The state claims the company runs an illegal gambling business without a license.
Attorney General Letitia James and Governor Kathy Hochul filed the complaint on September 24. It targets QCX LLC, the company that operates Polymarket US.
The state wants a court to stop Polymarket from offering event contracts without a state gaming license. The request covers contracts tied to sports, elections, culture and other events.
What New York Is Asking For
New York is seeking a permanent injunction, restitution for customers and the return of any illegal profits. It also wants a penalty equal to three times the company’s gains.
The state is asking for $100,000 for each offer of unauthorized sports wagering. The filing does not say how many offers could count toward that total.
New York also wants Polymarket to provide an accounting of its customers, bets placed and customer losses.
Why the State Calls It Gambling
New York argues that users risk money on events outside their control. The state says that meets its legal definition of gambling.
“Calling it a ‘prediction market’ doesn’t change the facts. If you’re taking bets in New York, our gambling laws apply,” Hochul said.
The complaint says Polymarket launched its US app in December 2025 and advertised itself as “legal in all 50 states.” Investigators found markets on the New York Mets, college football, the governor’s race and the TV show “Big Brother.”
Age is another issue. Polymarket allows users aged 18 and older, while New York requires mobile sports bettors to be at least 21.
The state also points to taxes. Licensed mobile sports betting companies pay a 51% tax on gross gaming revenue, and New York collected $1.3 billion from mobile sports betting in fiscal year 2026.
“By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support,” James said.
The complaint also claims violations of the federal Wire Act. It alleges Polymarket has operated a sports wagering platform in New York since at least January 23, 2025.
Polymarket is also regulated at the federal level. QCX has been a Commodity Futures Trading Commission designated contract market since July 2025.
New York has sued other prediction market operators this year. It filed cases against Coinbase Financial Markets and Gemini Titan on April 21 and against Kalshi on July 31.
The CFTC says it has exclusive authority over event contracts on registered exchanges. It sued New York on April 24, arguing federal law overrides state gambling rules.
Courts have split on the question. The Ninth Circuit backed Nevada’s enforcement against Kalshi, while the Third Circuit found federal law may block New Jersey from enforcing its rules on Kalshi.
New Jersey asked the Supreme Court to take up the issue on September 2. Robinhood filed its own petition on September 9.
Reuters reported that Polymarket reached a projected annual revenue run rate of over $1 billion by June.
The New York lawsuit is still pending. Traders on Polymarket currently put the odds that the Supreme Court hears a sports contracts appeal before December at 22%.
