New York Wants to Ban Polymarket, Lawsuit Calls It 'Illegal Gambling Operation'

New York Attorney General Letitia James and Governor Kathy Hochul filed suit Wednesday against QCX LLC, which does business as Polymarket US, alleging the prediction market runs an unlicensed gambling operation in violation of state law. The complaint contends Polymarket allows customers to place money on outcomes that are uncertain and outside users' control, which New York classifies as gambling. The state said its investigation found the platform exposed New Yorkers — including people under the state's legal gambling age of 21 — to significant financial and personal risks.

The lawsuit asks a court to enjoin Polymarket from operating in New York, force forfeiture of its alleged earnings from the activity, order restitution to affected users, and impose fines equal to three times what the company earned through the challenged conduct. Officials additionally criticized Polymarket for avoiding the licensing requirements and tax obligations that apply to regulated casinos and mobile sportsbooks in the state.

Polymarket launched its U.S. service in December 2025 and offers markets on sporting events and a wide range of real-world outcomes. Prediction markets broadly let participants buy and sell contracts tied to event results; contracts typically settle at a fixed amount if an outcome occurs and at zero if it does not, making live prices behave like implied probabilities. The category has grown rapidly: both Polymarket and rival Kalshi reached multibillion-dollar valuations after major fundraises, and Bernstein analysts have projected prediction-market trading volumes could reach $1 trillion by 2030 with revenue near $10.8 billion.

New York's suit continues an aggressive enforcement push by James and Hochul into the prediction-market sector. In July the attorney general sued Kalshi seeking $36 billion, and earlier in the year New York sued Coinbase and Gemini over their prediction offerings. Those platforms and industry supporters have argued many prediction markets fall under federal oversight by the Commodity Futures Trading Commission rather than state gambling laws, but the CFTC has also signaled caution: its staff recently warned that certain "mention" contracts may invite manipulation.