In Brief:
- New York prosecutors accuse Polymarket of unlicensed gambling and seek a court order blocking its prediction markets across the state.
- Prosecutors seek restitution and financial penalties while citing unpaid gambling taxes and access for users below New York’s betting age.
- Polymarket plans to remain in New York as the case joins state lawsuits against rival platforms Kalshi, Coinbase and Gemini.
New York Attorney General Letitia James and Governor Kathy Hochul have taken Polymarket to court, alleging that its prediction markets operate as unlicensed gambling and put younger New Yorkers at risk.
Their lawsuit asks a judge to stop Polymarket from operating an unlicensed gambling business in the state. Prosecutors also seek financial penalties, forfeiture of alleged illegal gains, and restitution for customers who suffered harm.
According to the attorney general’s office, Polymarket lets users risk money on sporting events and other uncertain outcomes. New York argues those contracts qualify as gambling because customers cannot control the results.
The complaint alleges that Polymarket lacks a license from the New York State Gaming Commission. Prosecutors consequently accuse the company of avoiding taxes that licensed gambling operators must pay.
James linked that revenue to public schools, sports programs for underserved youth, and problem gambling services. She argued that operating outside the licensing system deprives New York families of those benefits.
We're back on X.
— 36Crypto (@36Crypto1) August 21, 2026
Our previous account (36crypto2) is currently unavailable while we continue working through the appeal process. In the meantime, this is our new official account. While you are on this page, please support us by sharing and following.
Hochul raised concerns about younger customers, citing the attorney general’s finding that Polymarket permits users aged 18 to 20 despite New York’s minimum age of 21 for mobile sports betting.  State officials argue that access exposes younger users to financial and personal risks.
Also Read: Dogecoin Discount Deepens as Musk’s NFT Joke Revives Attention on DOGE
New York Seeks Customer Restitution and Penalties
Alongside the operating ban, prosecutors want Polymarket to forfeit gains they attribute to the alleged violations. They also request restitution for harmed customers and fines equal to three times the company’s alleged illegal gains.
Those measures remain requests to the court, which must decide whether Polymarket’s contracts violate state law. The complaint marks another step in New York’s campaign against prediction market platforms.
In July, James and Hochul announced a lawsuit against Kalshi over allegations of unlicensed gambling. New York also sued Coinbase and Gemini in April over their prediction market operations.
The cases sit within a broader dispute over how authorities should regulate contracts tied to future events. States have applied gambling laws to such products, while prediction market companies have argued for federal oversight.
Polymarket Chief Legal Officer Neal Kumar responded that the company intends to remain in New York. He stated that Polymarket had worked with state officials to address their concerns.
Kumar also pointed to the company’s origins in a New York apartment and its workforce of more than 350 people there. His response did not resolve the state’s central claim that Polymarket needs a gaming license to offer its contracts.
A court ruling on New York’s request could determine whether Polymarket can offer its current markets in the state. For now, the lawsuit presents allegations, and the company has made clear that it intends to stay.
Also Read:
