A South Carolina lawyer has sued Polymarket and DraftKings Predictions, accusing them of using prediction markets and event contracts to offer illegal sports wagering to state residents. The complaint says the products violate South Carolina’s long-standing ban on sports betting and asks for recovery of losses, damages and costs under the state’s gambling-loss laws.
The filing, lodged in Charleston County’s Ninth Judicial Circuit, names James M. Hughes as plaintiff and DraftKings Inc. and related entities as defendants. It says the companies sit within a wider structure of brokers, exchanges, clearinghouses and market makers that together deliver, settle and finance wagers on sporting events.
According to the complaint, GUS III LLC, doing business as DraftKings Predictions, is the broker for DraftKings, while QCL Quad Code USA Corp. operates the Polymarket app. It also names QCX LLC, doing business as Polymarket US, as an exchange, and says the exchange and broker structure lets parent companies vertically integrate illegal sports betting operations.
It says the DraftKings Predictions homepage defaults to a Sports tab, offers categories including MLB and baseball, and advertises a “spend $5 to get $150” offer, while the app promotes a referral bonus of “$25 in Predictions Dollars.”
It also says Polymarket’s Apple App Store listing invites users to “Trade sports, politics, & more,” and that the app defaults to sports bets and a Live tab showing sporting events around the world on which bets can be placed.
The legal hook is the Statute of Anne, a centuries-old recovery law that South Carolina still uses in gambling disputes. The complaint says state law has made sports betting illegal since 1912, and cites provisions that allow a person to recover losses of more than $50 within three months, with recovery split between the plaintiff and the county where the bets were placed.
Hughes says defendants’ “prediction markets” label is just “rhetorical set dressing.” In the complaint, he describes the products as “sports bets under a different name” and says they create financial risk where none existed before.
He also argues the businesses are worsening gambling harm among younger people. The filing cites a study saying almost 60% of 18- to 22-year-olds gamble on sports each year, 10% do so weekly and 4% daily.
Beyond problem gambling, Hughes says even bettors who do not have an addiction can face serious financial consequences. The complaint says he seeks to recover the losses won from South Carolina residents, plus three times the amount of those losses and the costs of suit.
The lawsuit lands as prediction markets face pressure in several states and in federal court. The complaint says attorneys general and regulators in at least 14 states have challenged the model, and it points to mixed appellate outcomes in other disputes, including a Third Circuit ruling in Kalshi’s favor in New Jersey and a Sixth Circuit decision denying an emergency injunction against Ohio.
