New York Governor Kathy Hochul and Attorney General Letitia James announced Thursday that the state is suing Polymarket US, accusing the prediction-market platform of running an unlicensed gambling business that was accessible to New Yorkers as young as 18 — three years below the state's legal mobile betting age of 21.
The lawsuit, filed by Attorney General James' office against QCX LLC, which operates Polymarket US, seeks a court order blocking the company from operating as an unlicensed gambling business in New York, along with fines, forfeiture of what officials describe as illegal gains, and restitution payments to users, according to Governor Kathy Hochul's office. New York law requires mobile sports betting operators to hold a license from the state Gaming Commission and restricts betting to people 21 and older, a threshold the state says Polymarket US ignored. As Bloomberg reported, the case brands the platform an alleged unlicensed gambling business operating in the state without authorization.
A Regulated Comeback Under Fire
Polymarket paid $1.4 million in January 2022 to settle Commodity Futures Trading Commission enforcement charges after regulators found it had run an unregistered facility for event-based binary options contracts. The settlement required Polymarket to wind down noncompliant contracts, according to DLA Piper.
To get back into the country legally, Polymarket acquired QCEX for $112 million in July 2025, a deal that paved the way for the December 2025 launch of Polymarket US, per Blockworks. QC Exchange had filed with the CFTC to be designated as a contract market. New York's new lawsuit alleges that Polymarket US operated an unlicensed gambling business in the state.
Part Of A Much Bigger Legal Fight
This is not James' first swing at a prediction-market operator. Her office filed a separate lawsuit against competitor KalshiEX LLC in state court in late July, seeking roughly $36 billion in penalties and disgorgement over similar claims that Kalshi operated an illegal gambling business in New York, according to Courthouse News Service. New York officials contend that sports-linked event contracts function as sports betting subject to state gaming oversight, regardless of how the platforms are federally structured.
The state fight sits inside a larger jurisdictional standoff. The federal government and the CFTC sued Illinois, Arizona, and Connecticut in April, arguing the Commodity Exchange Act gives the CFTC exclusive jurisdiction over designated contract markets and that state cease-and-desist orders create an unlawful, fragmented regulatory patchwork, per the Associated Press. That case underscores the core question hanging over every one of these lawsuits: whether federal commodities law preempts state gambling enforcement, or whether states retain police power to protect residents from what they call illegal wagering.
Other States Are Piling On Too
New York isn't alone in taking aim at Polymarket.
Missouri Attorney General Catherine Hanaway sent cease-and-desist letters to six prediction-market platforms, including Polymarket, this month, accusing them of facilitating unlicensed sports wagers statewide.
With federal courts weighing whether the Commodity Exchange Act preempts state gambling statutes, the fight over Polymarket US in New York is unlikely to resolve quickly. The parallel Kalshi litigation also raises the same preemption question.
