New York Sues Polymarket and Seeks Triple Its Alleged Illegal Gains
New York has sued Polymarket US, alleging that its prediction markets amount to an unlicensed gambling business. The state wants the platform stopped from operating without a gaming licence and is seeking restitution, forfeiture and penalties tied to its alleged gains.
The case was filed on September 24 against QCX LLC, which operates Polymarket US. New York Attorney General Letitia James argues that the company’s event contracts fall within the state’s definition of gambling and that QCX has no licence from the New York State Gaming Commission.
The 33-page petition asks for considerably more than an injunction.
Triple Gains Plus $100,000 per Offer
New York wants Polymarket to provide an accounting of bets, customer losses and money received through the business. The state is also seeking several forms of financial relief:
- Restitution and disgorgement of money tied to the alleged violations;
- A penalty equal to three times the gains Polymarket made through the practices alleged in the case;
- Up to $100,000 for each offer or attempted offer of unauthorized sports wagering or mobile sports wagering in New York.
The filing does not put a total value on those demands. The Attorney General’s office also says Polymarket is available to users aged 18 to 20, while New York requires mobile sports bettors to be at least 21.
One example buried in the filing goes beyond that age difference. Investigators cite a Polymarket market on the September 3 college football game between the University at Albany and the University at Buffalo.
New York prohibits betting on events involving a New York college team even through licensed sportsbooks. That means obtaining a standard mobile betting licence would not by itself make that particular market permissible under the state’s rules.
Polymarket Files Its Own Case Hours Later
Polymarket did not leave the dispute entirely in state court. Later on September 24, the company filed a federal lawsuit against James and other New York officials. It argues that its federally regulated prediction market falls under the Commodity Futures Trading Commission rather than state gambling authorities.
Chief Legal Officer Neal Kumar said Polymarket had tried to resolve its differences with state officials before the lawsuits were filed.
What Comes Next
The New York case comes a day after Polymarket’s regulatory push in Europe recently covered by 15M, where the company argued for some prediction markets to be treated as financial products rather than gambling.
The next issue is whether Polymarket can keep offering its markets in New York while the state and federal cases move forward. The federal case will also test the company’s argument that CFTC oversight leaves no room for New York to regulate the same contracts as gambling.