New York Attorney General Letitia James has sued Polymarket’s U.S. operation, alleging that its event-contract platform is an illegal, unlicensed gambling business that offered sports and other wagers to state residents.
The verified petition, filed Sept. 24 in the Supreme Court of the State of New York in Manhattan, names QCX LLC, doing business as Polymarket US. It seeks a permanent injunction stopping the company from operating without a New York State Gaming Commission licence, along with restitution, disgorgement of alleged illegal gains and civil penalties.
The state is seeking a penalty equal to three times Polymarket’s alleged gains, $100,000 for each sports-wagering offering or attempted offering, an accounting of bets and customer losses, and $2,000 in costs. The petition contains eight causes of action under Executive Law § 63(12), invoking the state constitution’s gambling prohibition, state penal and racing laws, and the federal Interstate Wire Act.
New York argues that the contracts meet the legal definition of gambling because customers stake money on uncertain outcomes outside their control. The state says Polymarket was not licensed by the Gaming Commission in any capacity and used prediction markets tied to sporting events, elections and culture as a way to avoid the rules and taxes applied to licensed operators.
The petition also alleges that Polymarket US allowed people aged 18 to 20 to open accounts, although New York sets 21 as the minimum age for mobile sports wagering. It cites contracts on the NBA Finals, Mets-Braves games and the Super Bowl, as well as a Sept. 3 football game involving the University at Albany and the University at Buffalo, despite the state’s restrictions on wagering involving in-state college teams.
James said the platform exposed New Yorkers to gambling addiction with few, if any, safeguards. Governor Kathy Hochul backed the action, saying unlicensed gambling put residents at risk, particularly underage users.
Polymarket said it was disappointed that officials had chosen to sue. Its chief legal officer, Neal Kumar, said the company had sought to engage directly with the attorney general’s office about its concerns and remained open to a discussion about consumer protection and “fair, transparent and legal markets.”
The U.S. platform launched in December 2025 through QCX, a Commodity Futures Trading Commission-designated contract market that obtained its status by acquiring QCEX. The petition cites an article estimating Polymarket’s valuation at more than $20 billion and its annualized U.S. revenue at more than $1 billion.
The lawsuit follows New York’s July action against Kalshi over similar allegations, as reported in July. James had warned in a Feb. 2 consumer alert that prediction markets could be presented as high-tech forecasting or speculation while operating without the protections and Gaming Commission supervision required of licensed gambling businesses.
The case lands amid a wider jurisdictional battle between states and federal derivatives regulators. The CFTC has asserted exclusive authority over prediction markets, while federal appeals courts have reached differing conclusions on oversight. Judge Analisa Torres rejected Kalshi’s argument that federal commodities law pre-empted state gambling regulation in a July 8 ruling.
State enforcement has also broadened. Connecticut ordered Polymarket and eight other platforms to stop offering sports event contracts on Sept. 10, while Missouri sent Polymarket and five other operators cease-and-desist letters on Sept. 18.
