New York Sues Polymarket for Illegal Unlicensed Gambling

New York Governor Kathy Hochul and Attorney General Letitia James filed a lawsuit on September 24, 2026, against QCX LLC, doing business as Polymarket US. The state alleges the prediction market platform has operated an illegal, unlicensed gambling business since December 2025, bypassing the New York State Gaming Commission and evading taxes that fund public services. Officials specifically claim the platform allowed users aged 18 to 20 to bet, violating the state's minimum age of 21 for mobile sports betting.

The lawsuit seeks a court order to halt operations, the forfeiture of all illegal gains, restitution for consumers, and fines totaling three times the company's profits. This action follows a broader state crackdown on similar platforms, including Kalshi, Coinbase, and Gemini Titan.

Polymarket responded hours later by filing a federal lawsuit in Manhattan to block the state's actions. The company argues that its event contracts are federally regulated derivatives under the jurisdiction of the Commodity Futures Trading Commission rather than state-level gambling. Chief Legal Officer Neal Kumar characterized the state's lawsuit as a recycled action and vowed to fight the case to maintain the company's presence in New York. The legal conflict may eventually reach the U.S. Supreme Court.