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New York sues Polymarket over alleged illegal gambling

24 September 2026
(PRESS RELEASE) -- Governor Kathy Hochul and New York Attorney General Letitia James today announced a lawsuit against QCX LLC d/b/a Polymarket US (Polymarket) for running an illegal gambling operation in New York through its prediction market platform. Polymarket launched in the United States in December 2025 as a service that allowed users to bet money on the outcome of sporting events, promising users “sports — followed by markets on everything.” An investigation by the Office of the Attorney General (OAG) found that Polymarket’s prediction market is an illegal, unlicensed gambling operation that exposes New Yorkers — including those under the legal gambling age of 21 — to serious personal and financial risk. The lawsuit is seeking a court order stopping Polymarket from operating as an unlicensed gambling business and requiring the company to pay fines, forfeit all illegal gains and pay restitution to users.

“I will always stand up for New Yorkers when bad corporate actors prey on consumers and threaten tax dollars that fund schools and critical public services,” Governor Hochul said. “By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming. Nobody is above the law in our state, and working with Attorney General James, we are fighting to protect New Yorkers and put this illegal operation to an end.”

Attorney General Letitia James said, “Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs. By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support. My office will never hesitate to take action to defend our laws and keep New Yorkers safe.”

The lawsuit alleges that Polymarket’s prediction markets meet the legal definition of gambling because the outcomes of the events on which its users are betting are uncertain and outside the control of the bettor or hinge on a game of chance. Despite this, Polymarket has failed to obtain a license from the New York State Gaming Commission, sidestepping its obligation to pay taxes like licensed casinos and mobile sports gambling platforms do. This tax revenue from gambling regulation funds public schools, sports programs for underserved youth and problem gambling education and treatment.

Polymarket’s prediction markets are also available to users between the ages of 18-20, even though New York law requires a person to be at least 21 years old to participate in mobile sports betting. Exposing young people to online gambling can have damaging effects on their mental and financial well-being. A recent study by the National Institute of Health found that early exposure to gambling increases the likelihood of depression, anxiety, mood swings and financial stress. Further, a study by the American Psychological Association found that 32 percent of those with a gambling disorder experience suicidal ideation.

In the lawsuit filed today, Attorney General James is asking the court to order Polymarket to forfeit all illegal gains, distribute restitution to consumers who were harmed, and pay fines equal to three times the gains the company made through its illegal actions.

This is the latest action in Governor Hochul and Attorney General James’ continued efforts to enforce New York’s gambling laws and protect New Yorkers. Attorney General James has issued multiple consumer and industry alerts warning New Yorkers about the hazards of gambling and encouraging companies to comply with state laws. In September 2026, Attorney General James secured $8 million from the leading operator of sweepstakes casinos. July 2026, Attorney General James and Governor Hochulannounced a lawsuit against Kalshi for running an illegal gambling platform. In April 2026, Attorney General James sued Coinbase and Gemini for running illegal gambling platforms. Also in April 2026, Governor Hochul signed an Executive Order banning state employees from engaging in insider trading using prediction markets like Polymarket. In January 2026, Attorney General James sued Valve, a video game developer, for illegally promoting gambling through video games popular with children and teenagers. In June 2025, Attorney General James stopped 26 illegal online sweepstakes casinos that offered slots, table games and sports betting using virtual coins that could be exchanged for cash and prizes.

Governor Hochul and Attorney General James urge New Yorkers to ensure gambling platforms are registered with the New York State Gaming Commission and report any misconduct or gaming fraud to OAG by filing a complaint online, which can be done anonymously, or calling 1-800-771-7755.

This matter is being handled by Assistant Attorneys General Geoffery R. Andreu, K. Brent Tomer, Alejandra de Urioste, Nina Varindani, and Senior Enforcement Counsel Tanya Trakht and Legal Assistant Renata Bodner, all of the Investor Protection Bureau, Senior Detective Brian Metz of the Investigations Division. Assistance was additionally provided by Chief Economist Chitra Marti and Data Scientist Hanna King. The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim and is a part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Meghan Faux.

New York sues Polymarket over alleged illegal gambling is republished from iGamingNews.com.


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