New York Takes Action Against Polymarket

New York Attorney General Letitia James filed a petition in Manhattan state court on September 24, 2026, seeking to stop Polymarket from offering event contracts to New York residents without a state gaming license. The filing describes the platform’s markets as gambling because participants wager money on outcomes they cannot control, such as sporting events. Officials also point to the company’s mobile app, launched in December 2025, as a vehicle for such contracts tied to real-world events.

James and Governor Kathy Hochul argue that the operation exposes residents—especially those under 21—to gambling risks without the safeguards required of licensed operators. The state wants a court order barring Polymarket from New York, ordering restitution for affected customers, imposing civil fines, and requiring the company to forfeit gains it earned through the alleged activities.

Details of the Allegations

The petition specifically cites Polymarket’s sports-related contracts, including one tied to a July baseball game between the Los Angeles Dodgers and New York Mets. Officials contend these products function as unlicensed wagering under New York law, which requires licenses for mobile sports betting and sets a minimum age of 21 for such activities. The company, which operates as QCX LLC doing business as Polymarket US, is accused of offering these markets while avoiding state oversight and associated taxes paid by regulated casinos and sportsbooks.

James has described the business model as an attempt to evade New York’s close regulation of gambling. Hochul added that the platform has placed New Yorkers at risk, particularly younger users who are more vulnerable to problem gambling. The suit extends to advertising practices directed at New York residents, raising concerns about consumer protection.

Similar Cases and Broader Context

This action forms part of a coordinated effort by New York officials against prediction markets. In July, James sued rival Kalshi over similar event contracts, seeking $36 billion in fines and restitution. Earlier, in April, the state targeted prediction offerings from Coinbase Financial Markets and Gemini Titan. All cases allege that these platforms run unlicensed gambling by sidestepping the New York State Gaming Commission’s requirements.

The disputes center on a jurisdictional conflict with federal authorities. Prediction market operators maintain that contracts traded on federally registered exchanges fall under Commodity Futures Trading Commission oversight. State officials counter that federal rules on derivatives do not override state authority to license and regulate sports wagering, including age restrictions and harm protections. New Jersey recently petitioned the U.S. Supreme Court to resolve this split in the Kalshi litigation.

Court rulings have varied: a Third Circuit decision in April upheld an injunction blocking New Jersey enforcement against Kalshi, while a Ninth Circuit ruling in August allowed Nevada regulators to proceed. These preliminary orders do not yet settle the underlying claims and highlight the ongoing uncertainty for the industry.

Polymarket has not issued a detailed public response in the available reporting, though the company previously expressed disappointment with related inquiries. The New York case operates independently of a separate city council investigation into marketing practices at Polymarket, Kalshi, Coinbase, and Gemini Titan.