NYS sues to shut down Polymarket US, saying prediction market is actually illegal gambling operation

State officials have filed a lawsuit against Polymarket US, a self-described prediction market platform launched in the United States last December, claiming it’s really an illegal gambling operation.

The lawsuit, filed in state Supreme Court and announced Thursday by Gov. Kathy Hochul and state Attorney General Letitia James, alleges QCX LLC, doing business as Polymarket US, provides a service that allows "users to bet money on the outcome of sporting events" despite the fact, the complaint stresses: "Gambling is illegal in New York with certain limited exceptions."

The state is seeking a court order stopping Polymarket from operating as an unlicensed gambling business in the state and is seeking a decision ordering the company to "pay fines, forfeit all illegal gains, and pay restitution to users."

James said an investigation by the Office of the Attorney General found the Polymarket US prediction market service is "an illegal, unlicensed gambling operation" that exposes New Yorkers, including a segment under the legal gambling age of 21, to what it described in a statement Thursday as "serious personal and financial risk."

A spokesman for Polymarket said in a statement: " 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 suit comes two months after the state filed a similar suit against the prediction market provider Kalshi.

In late August, Kalshi, on its website, issued a public response to the assertions made in lawsuits against it, stating it is "flat-out wrong" to allege its product is "indistinguishable" from traditional sports betting — or sports betting platforms.

In its suit against Polymarket, state officials argue prediction markets meet the legal definition of gambling because "the outcomes of the events on which" users are betting are "uncertain and outside the control of the bettor" — or that they "hinge on a game of chance."

It also argued prediction markets are available to users  ages 18 to 20, though state law requires a person be at least 21 to participate in mobile sports betting.

It noted a recent study by the National Institute of Health found early exposure to gambling "increases the likelihood of depression, anxiety, mood swings, and financial stress" — and that the American Psychological Association found almost a third of those with a gambling disorder experience what it described as "suicidal ideation."

By John Valenti

john.valenti@newsday.com

John Valenti, a Newsday reporter since 1981, has been honored nationally by the Associated Press, Society of the Silurians and National Headliner Awards for investigative, enterprise and breaking news reporting, as well as column writing. He is the author of “Swee'pea,” about New York playground basketball star Lloyd Daniels. His debut crime novel, “For Nothing Is Hidden,” rooted in 1950s Long Island, was released in October 2025.