New York officials have taken legal action against Polymarket, seeking to stop the prediction market operator from offering its services in the state without a gambling license.
Attorney General Letitia James and Governor Kathy Hochul filed the lawsuit Thursday against QCX LLC, which operates as Polymarket US. The state alleges that the company is running an illegal gambling operation through its prediction market contracts.
New York is asking the court to prohibit Polymarket US from continuing to operate without a state-issued gambling license. The state is also seeking the forfeiture of allegedly unlawful proceeds, customer restitution and civil penalties amounting to three times those proceeds.
Polymarket relaunched its U.S. platform in December 2025, initially allowing customers to trade contracts based on the outcomes of sporting events. The company said following the launch that it intended to broaden its offerings to other types of prediction markets.
State officials argue that Polymarket’s sports contracts constitute gambling because users stake money on events whose outcomes are uncertain. The lawsuit also claims the platform permits customers between 18 and 20 years old to participate. New York’s mobile sports betting rules, however, set the minimum age at 21.
Polymarket had not immediately provided a response to the allegations.
The case comes as prediction market operators face increasing scrutiny from state gambling authorities over the regulatory status of event contracts.
Companies in the prediction market sector have argued that their contracts are financial instruments subject to federal oversight by the Commodity Futures Trading Commission (CFTC). State regulators have disputed that position, particularly for sports-related contracts, saying the products operate like wagers and should therefore be governed by state gambling laws.
New York has already taken similar action against another prediction market operator. The state sued Kalshi in July following unsuccessful negotiations with Hochul’s office and sought up to $36 billion in penalties and disgorgement. Several disputes involving prediction markets have reached appellate courts, while the Kalshi-New Jersey case has been appealed to the U.S. Supreme Court.
James said the state’s gambling regulations are designed to protect New Yorkers, address the potential effects of problem gambling and preserve funding for education and other public programs.
The lawsuit comes less than a year after Polymarket returned to the U.S. market.
