New York State Sues Polymarket, Alleging It Operates an Unlicensed Gambling Business

TechFlow reports that on September 25, according to Crowdfund Insider, New York Attorney General Letitia James and Governor Kathy Hochul have filed a civil lawsuit against QCX LLC, the operating entity behind Polymarket US, alleging that it conducted an unlicensed gambling business by offering event contracts for sports, elections, and other matters through its prediction market to local users without authorization from the New York State Gaming Commission.

The complaint also notes that the minimum age for mobile sports betting in New York is 21, yet Polymarket is accused of allowing users aged 18 to 20 to participate. The state is seeking a court order to cease Polymarket's related operations and advertising locally, demanding the forfeiture of alleged illicit proceeds, restitution to users, and civil penalties of up to three times the associated revenues; additionally, for unauthorized sports betting activities, the state government requires an extra $100,000 penalty for each instance of providing or attempting to provide the service.

Polymarket Chief Legal Officer Neal Kumar stated that the company plans to contest the lawsuit. According to the report, Polymarket subsequently filed its own suit, arguing that the U.S. Commodity Futures Trading Commission (CFTC) has exclusive regulatory jurisdiction over such event contracts.