New York’s attorney general has sued Polymarket, asserting that its U.S. platform runs unlicensed gambling operations and requesting extensive monetary penalties.
Lawsuit specifics
The complaint, filed on September 24, asks a state court to bar Polymarket’s U.S. entity, QCX LLC, from offering any event-based contracts without a New York State Gaming Commission license. The petition lists contracts linked to sports events, elections, cultural moments and other outcomes, describing them as wagers that expose users to financial risk on matters beyond their control.
The state argues that Polymarket’s marketing, which promoted a nationwide app launch in December 2025 and claimed the service was “legal in all 50 states,” directly targeted New York residents. Investigators identified markets involving the New York Mets, college football, the state governor’s race and a reality-TV show, and contend the platform solicited participants through online channels.
Regulatory backdrop
Polymarket has been recognized as a designated contract market by the Commodity Futures Trading Commission (CFTC) since July 2025, placing it under federal derivatives oversight. New York’s action highlights the tension between that federal designation and state gambling statutes, a conflict previously explored in suits against Coinbase Financial Markets, Gemini Titan and Kalshi.
The attorney general also alleges violations of the federal Wire Act for transmitting sports-wager information and confirming payments across state lines. Additionally, the complaint notes that Polymarket permits users aged 18 and older, whereas New York requires mobile sports bettors to be at least 21, reinforcing the claim of non-compliance with state safeguards.
Relief and penalties sought
Beyond an injunction, the state seeks a detailed accounting of Polymarket’s customers, bets placed, losses incurred and profits earned. It requests full restitution for affected users, disgorgement of gains derived from the alleged illegal activity, and a penalty equal to three times those gains.
For each instance of unauthorized sports wagering or attempts to offer such services within the state, the petition proposes a $100,000 fine. The total amount of that component remains undefined, as it depends on the number of qualifying offers identified.
Why it matters
The lawsuit reflects New York’s broader strategy to enforce its gambling laws on platforms that operate under the prediction-market label, regardless of federal recognition. A ruling against Polymarket could set a precedent that forces other CFTC-registered contract markets to obtain state gambling licenses or alter their product offerings. The outcome may also influence how crypto-related prediction markets navigate the overlapping jurisdictions of federal derivatives regulation and state gambling enforcement, shaping the future regulatory landscape for decentralized finance applications.
