NY Cracks Down: AG James & Gov Hochul Sue Polymarket for Illegal Gambling

New York Attorney General Letitia James and Governor Kathy Hochul have launched a significant legal offensive against Polymarket, alleging the prediction market platform is operating an illegal, unlicensed gambling business within the state.

The lawsuit, filed against QCX LLC (doing business as Polymarket US), seeks to immediately halt the company's operations in New York. Authorities are demanding that Polymarket forfeit all illegal gains, provide restitution to harmed users, and pay fines equivalent to three times the profits derived from these alleged violations.

Why Polymarket is Targeted

According to the Attorney General’s Office, Polymarket’s core function—allowing users to bet on uncertain outcomes outside their control—fits the legal definition of gambling. However, the platform has allegedly avoided obtaining a license from the New York State Gaming Commission, thereby evading taxes and regulatory requirements imposed on licensed operators.

"By skirting New York's laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support," said Attorney General James.

Governor Hochul emphasized the public safety concerns, noting that the company has "put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming."

Underage Access Concerns

A critical component of the lawsuit is the allegation that Polymarket permits users aged 18 to 20 to participate. This stands in direct violation of New York’s minimum age requirement of 21 for mobile sports betting and other forms of online gambling. The state argues that allowing younger individuals access exposes them to severe financial and psychological risks associated with problem gaming.

Demands and Precedent

James is asking the court to order Polymarket to:

• Cease operations as an unlicensed gambling entity in New York.
• Forfeit all gains from alleged illegal activity.
• Provide restitution to consumers harmed by the platform.
• Pay fines equal to three times the gains made through violations.

This action follows a broader crackdown by New York officials on prediction markets. In July, James and Hochul sued Kalshi for similar allegations, and in April, they took legal action against crypto exchanges Coinbase and Gemini, accusing them of facilitating illegal gambling platforms.

Residents can verify if a gambling platform is registered with the New York State Gaming Commission or report suspected fraud via the Attorney General’s online portal or by calling 1-800-771-7755.