New York sues Polymarket over alleged illegal gambling operations

September 25, 2026 at 01:15 AM2 min

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New York Attorney General Letitia James filed a lawsuit against Polymarket on Thursday, alleging the prediction market company operates illegal gambling without a state gaming license. The suit seeks to stop Polymarket from offering event contracts in New York and demands restitution, disgorgement, and penalties. The action follows a similar lawsuit against competitor Kalshi two months earlier.

Key Facts

New York Attorney General Letitia James filed the lawsuit against Polymarket on Thursday, Sept. 24, 2026.
The lawsuit seeks to stop QCX LLC, operating as Polymarket US, from offering event contracts without a state gaming license and demands restitution, disgorgement, and penalties.
Polymarket is valued at more than $20 billion and has advertised sports betting since July 2025.
New York state law requires users to be at least 21 years old for mobile sports betting, but Polymarket allegedly targeted users as young as 18.
QCX LLC has been a CFTC-designated contract market since July 2025, placing the lawsuit within a broader dispute over federal derivatives oversight and state gambling laws.

The Lawsuit

New York Attorney General Letitia James filed the lawsuit against Polymarket on Thursday, alleging the company operates an unlicensed gambling business. The suit, filed in a New York state court, asks the court to stop QCX LLC, which operates as Polymarket US, from offering event contracts without a state gaming license. The petition covers contracts tied to sports, elections, culture, and other events. The lawsuit comes two months after New York filed a similar suit against competitor Kalshi.

State Allegations

New York argues that Polymarket's contracts meet the state's definition of gambling because customers risk money on outcomes outside their control. The state alleges Polymarket targeted users as young as 18, while New York law requires users to be at least 21 for mobile sports betting. Attorney General James said Polymarket is 'targeting the most vulnerable and depriving New York families of critical services and support.' Governor Kathy Hochul stated that Polymarket 'put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming.'

Company Response and Context

Polymarket's chief legal officer Neal Kumar said the company chose to engage with regulators directly on the substance, but 'they preferred the media hit.' QCX LLC has been a CFTC-designated contract market since July 2025, placing the lawsuit within a broader dispute over federal derivatives oversight and state gambling laws. The lawsuit claims Polymarket has advertised sports betting since July 2025, citing an August 17, 2025 post on X about its US mobile app launch.