10 minutes ago
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Summary
- New York sued Polymarket on Thursday, alleging the prediction market is operating an unlicensed gambling business in the state.
- The state wants to block Polymarket from operating without a gambling license and is seeking restitution, forfeiture of alleged illegal gains and financial penalties.
- The case adds to a broader fight over whether prediction markets should be regulated federally by the CFTC or subject to state gambling laws.
New York Attorney General Letitia James and Governor Kathy Hochul sued prediction market provider Polymarket’s U.S. business Thursday, alleging the platform is running an illegal gambling operation in the state.
The lawsuit, filed against QCX LLC, which does business as Polymarket US, asks a court to stop the company from operating in New York without a gambling license. The state also wants Polymarket to give up what it said are illegally earned gains, pay restitution to customers and face fines equal to three times those gains.
Polymarket launched its U.S. platform in December 2025 with markets that let users put money on the outcomes of sporting events. The company said at the time that it planned to expand into other types of markets.
New York argued those contracts amount to gambling under state law because users are putting money on events with uncertain outcomes. The state also said Polymarket lets people ages 18 to 20 use the platform, while New York requires users to be at least 21 to participate in mobile sports betting.
A Polymarket spokesperson did not immediately return a request for comment.
The case adds to a growing fight between prediction markets and state gambling regulators over who has the authority to oversee the products.
Prediction market companies argue that their event contracts are financial products overseen at the federal level by the Commodity Futures Trading Commission (CFTC). States have taken a different view, particularly when the contracts involve sports, arguing that the products are effectively bets and must follow state gambling rules.
New York has been one of the most active states in that fight. The state sued Kalshi in July after negotiations between the company and Hochul's office broke down, seeking as much as $36 billion in penalties and disgorgement. Many of these court cases have gone to appeals courts, and a recent case between Kalshi and New Jersey has been appealed to the U.S. Supreme Court.
“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 a statement.
The lawsuit comes less than a year after Polymarket returned to the U.S. market.
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The Definitive Stablecoin Landscape Series: Asia Pacific
The Definitive Stablecoin Landscape Series: Asia Pacific
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Sep 15, 2026
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Why it matters:
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.