Timeline
- 8.5
New York Sues Polymarket Over Unlicensed Gambling Operation - CryptoRank
New York Attorney General Letitia James and Governor Kathy Hochul have sued Polymarket US, alleging the crypto prediction market has been running an illegal, unlicensed gambling operation in the state. Polymarket says its markets are federally regulated CFTC event contracts, pointing to its acquisition of a CFTC-licensed firm and more than 350 employees. The case raises regulatory risk for crypto prediction markets and could hurt adoption, fundraising, token and market liquidity, according to CryptoRank. It also sharpens the jurisdictional dispute over whether event contracts fall under federal derivatives rules or state gambling law. Polymarket recently introduced perpetual trading with up to 20x leverage. New York had already sued Polymarket's competitor Kalshi in July on similar grounds, after filing suits against Coinbase and Gemini in April over operating prediction market platforms without state gambling licenses.
- 8.5
New York Sues Polymarket, Calling Prediction Market an Illegal Gambling Operation
New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit Wednesday against QCX LLC, which does business as Polymarket US, alleging the platform runs an illegal, unlicensed gambling operation in the state. The state is asking a court to bar Polymarket from operating in New York, force forfeiture of its gains, order restitution to users, and impose fines equal to three times what it earned through the alleged conduct. The suit marks a state-level enforcement action against a leading prediction market that, if granted, would cut the platform off from New York users. James said Polymarket was "targeting the most vulnerable and depriving New York families of critical services and support," while Hochul said the company had "put New Yorkers at risk, especially those underage who are most vulnerable to problem gaming." The complaint alleges Polymarket's markets meet New York's legal definition of gambling because users bet money on uncertain outcomes outside their control, and the attorney general's office said its investigation found the platform exposes New Yorkers, including those under the legal gambling age of 21, to financial and personal risk. Officials argued the company sidestepped the licensing requirements and taxes paid by regulated casinos and mobile sportsbooks. Polymarket launched in the U.S. in December 2025.