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

Governor Kathy Hochul and Attorney General Letitia James filed suit against Polymarket for operating an illegal gambling business in New York. The platform launched in the United States in December 2025 offering bets on sporting events and other outcomes. State officials allege it functions as unlicensed gambling because event results are uncertain and outside the bettor’s control.

The Office of the Attorney General determined that Polymarket exposes users, including those under the legal gambling age of 21, to financial and personal harm. The lawsuit seeks a court order to halt operations, require forfeiture of illegal gains, mandate restitution to users, and impose fines equal to three times the company’s gains from the activity. It also notes that the platform has sidestepped taxes paid by licensed casinos and mobile sports betting operators, revenue that supports schools, youth sports, and problem gambling programs.

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 suit highlights that Polymarket accepts users aged 18-20 even though New York requires age 21 for mobile sports betting. It references a National Institute of Health study on increased risks of depression, anxiety, mood swings and financial stress from early exposure, plus an American Psychological Association finding that 32 percent of those with a gambling disorder experience suicidal ideation.

Unlicensed Status and Legal Definitions

Polymarket obtained no license from the New York State Gaming Commission. The complaint states its prediction markets fit the statutory definition of gambling under state law. This action continues James’s prior steps, including a $8 million recovery in September 2026 from a sweepstakes casino operator, a July 2026 suit against Kalshi, April 2026 suits 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 a June 2025 shutdown of 26 illegal online sweepstakes casinos. As reported by G3 Newswire, the case targets both consumer protections and lost public revenue.

Enforcement Direction for Prediction Platforms

New York continues to apply its gambling framework to emerging prediction products. The repeated actions against unlicensed operators signal that platforms must obtain state approvals or face shutdown orders, tripled penalties, and restitution demands. Prediction market participants will track whether this approach influences licensing pathways or deters market entry in similar jurisdictions.

Reporting: G3 Newswire

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