New York Governor Kathy Hochul and Attorney General Letitia James have initiated legal action against QCX LLC, which operates under the name PolymarketUS. They accuse the prediction market operator of conducting an unauthorized and illegal gambling business within the state.
Polymarket, which began its operations in the U.S. in December 2025, allows users to place bets on various outcomes, including sports events. According to the New York Office of the Attorney General (OAG), an investigation revealed that the platform's prediction markets qualify as gambling since the outcomes involve uncertainty and are influenced by chance, which is beyond the control of bettors.
The lawsuit claims that Polymarket did not secure a license from the New York State Gaming Commission, thereby evading taxes that licensed casinos and mobile sports betting platforms are required to pay.
Additionally, New York officials allege that Polymarket permits individuals aged 18 to 20 to engage in betting, despite state regulations mandating that participants must be at least 21 years old for mobile sports wagering.
The legal action seeks a court injunction to halt Polymarket's operations as an unlicensed gambling entity, along with the seizure of alleged illegal profits, compensation for impacted consumers, and penalties amounting to three times the earnings derived from the purported illegal activities.
Governor Hochul emphasized that labeling the operation as a “prediction market” does not alter its legal implications. “If you’re taking bets in New York, our gambling laws are applicable,” she stated. “Today, @NewYorkStateAG and I sued Polymarket for running an illegal gambling operation and exploiting vulnerable New Yorkers.”
Hochul further remarked, “I will always advocate for New Yorkers when unscrupulous corporate entities target consumers and jeopardize tax revenues that support schools and essential public services.”
She added, “By operating without a license, Polymarket has not only willfully violated state law but has also endangered New Yorkers, particularly those underage who are most susceptible to gambling problems. No one is above the law in our state, and in collaboration with Attorney General James, we are committed to safeguarding New Yorkers and terminating this illegal operation.”
Attorney General James stated that New York’s gambling regulations are designed to protect consumers, mitigate the risks associated with problem gambling, and ensure funding for educational and public benefit initiatives. “By bypassing New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of essential services and support. My office will always act decisively to uphold our laws and ensure the safety of New Yorkers,” she affirmed.
The OAG highlighted that gambling tax revenues contribute to public schools, sports programs for underserved youth, and education and treatment for problem gambling.
This lawsuit marks the latest enforcement action related to gambling by Hochul and James. Previously, they filed a lawsuit against Kalshi in July 2026 for allegedly running an illegal gambling platform, and in April 2026, James took legal action against Coinbase and Gemini for similar reasons.