New York has sued Polymarket, alleging the prediction market is running an “illegal, unlicensed gambling operation” in the Empire State.
The lawsuit, brought by Governor Kathy Hochul and Attorney General (AG) Letitia James, follows a similar case against Kalshi two months ago.
The state wants Polymarket to forfeit its gains, repay users “who were harmed” and pay fines of three times what it made “through its illegal actions”.
New York has claimed Polymarket meets the definition of gambling and that it failed to obtain a licence from the New York State Gaming Commission.
The allegations also centre around Polymarket being available to those aged 18 to 20. New York has a minimum gambling age of 21 for mobile sports betting.
The lawsuit has been filed against QCX LLC d/b/a Polymarket US (Polymarket).
Polymarket’s US arm is separated from its international business which runs on the Polygon blockchain.
The company acquired QCEX in July 2025 for $112m to fast-track its return to the US. QCEX is ratified by the Commodity Futures Trading Commission (CFTC).
Polymarket previously exited the US after agreeing a $1.4m settlement with the federal derivates regulator in 2022 for operating without authorisation.
Governor Hochul and AG James said Polymarket had been operating in New York, where it is also headquartered, since December 2025.
In July, the pair also launched a lawsuit against Kalshi, seeking up to $36bn in damages over similar allegations it was running an illegal gambling operation in New York.
Earlier this month, AG James secured an $8m settlement from VGW, the sweepstakes operator behind Chumba Casino and Global Poker, for operating in the state.
Governor Hochul said: “I will always stand up for New Yorkers when bad corporate actors prey on consumers and threaten tax dollars that fund schools and critical public services.
“By running an unlicensed gambling operation, Polymarket has done more than just knowingly violate state law, they have put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming.
“Nobody is above the law in our state, and working with Attorney General James, we are fighting to protect New Yorkers and put this illegal operation to an end.”
AG James added: “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support. My office will never hesitate to take action to defend our laws and keep New Yorkers safe.”
When asked to comment on the case by EGR, Neal Kumar, chief legal officer at Polymarket, said: “Polymarket was founded in a tiny NYC apartment and now has more than 350 employees here, embodying why people and businesses come here to make it.
“We believe in New York and we’re staying here. While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users.
“We didn’t run to preemptively sue the state – we chose to engage with them directly on the substance and address their concerns. They preferred the media hit.
“Any time the AG’s office wants to swing by, our door is open for a conversation about how we protect consumers and offer fair, transparent and legal markets.”
The post New York sues Polymarket over “illegal” gambling operation first appeared on EGR Intel.
Governor and Attorney General target the prediction market less than two months after suing Kalshi
The post New York sues Polymarket over “illegal” gambling operation first appeared on EGR Intel.