New York Governor Hochul and Attorney General James Sue Polymarket for Unlicensed Gambling via Prediction Markets

New York Governor Kathy Hochul and Attorney General Letitia James have sued Polymarket for operating an illegal, unlicensed gambling business in the state. The platform, which launched in the United States in December 2025, permitted bets on sporting events and other outcomes under the promise of “sports — followed by markets on everything.” As reported by G3 Newswire, the Office of the Attorney General investigation concluded that these prediction markets expose New Yorkers, including those below the legal gambling age, to personal and financial risks.

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.”

James said: “Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs. 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.”

The lawsuit alleges that Polymarket’s markets meet the legal definition of gambling because outcomes are uncertain, outside the bettor’s control, or hinge on chance. The company never obtained a license from the New York State Gaming Commission and has not paid the taxes required of licensed operators, which support schools, youth sports programs, and problem gambling treatment. The platform remains available to users aged 18-20, despite the 21-year minimum age for mobile sports betting. The suit cites research linking early gambling exposure to depression, anxiety, and other harms, including an American Psychological Association finding that 32 percent of those with a gambling disorder experience suicidal ideation.

Prosecutors seek a court order barring further unlicensed operations, plus forfeiture of all illegal gains, restitution to harmed users, and fines equal to three times the gains.

Pattern of Enforcement Actions

This suit forms part of sustained efforts by Hochul and James to enforce state gambling laws. Prior steps include securing $8 million from a sweepstakes casino operator in September 2026, a July 2026 lawsuit against Kalshi, April 2026 actions against Coinbase and Gemini, an April 2026 executive order barring state employees from insider trading on prediction markets, a January 2026 suit against Valve for promoting gambling to minors, and action against 26 illegal sweepstakes casinos in June 2025.

Reporting: G3 Newswire

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