New York Sues Polymarket Over Unlicensed Gambling Operation

New York’s Attorney General Letitia James and Governor Kathy Hochul have taken legal action against Polymarket US, accusing the company of running an illegal gambling operation in the state. The lawsuit, filed on September 24, 2026, claims that Polymarket operates a prediction market platform without the proper license required in New York.

Polymarket allows users to bet on the outcomes of various events, including sports matches. The state says these bets meet the legal definition of gambling because the results are uncertain and beyond the bettor’s control. Despite this, Polymarket has not obtained a licence from the New York State Gaming Commission, which is mandatory for gambling operators in the state.

Another concern raised by the lawsuit is that Polymarket permits users aged 18 to 20 to participate, while New York law requires gamblers to be at least 21 years old for mobile sports betting. The state warns that exposing younger people to gambling can have serious mental and financial effects.

The lawsuit seeks to stop Polymarket from operating illegally in New York. It also asks the court to force the company to give up all profits made from its activities, pay restitution to affected users, and face fines equal to three times its illegal gains.

This case follows a similar lawsuit filed by New York against Kalshi, another prediction market operator, about two months earlier. Both cases are part of a broader effort by New York to enforce its gambling laws and protect residents from unregulated betting platforms.

At the same time, there is an ongoing dispute between New York and the federal Commodity Futures Trading Commission (CFTC). The CFTC claims it has exclusive authority over prediction markets like Polymarket and Kalshi. This disagreement may eventually be settled by the US Supreme Court.

Polymarket has expressed willingness to discuss concerns with state officials but has not publicly detailed its response to the lawsuit. For now, the case highlights the legal challenges facing prediction markets operating in the US.