New York sues Polymarket, seeks triple gains and $100,000 penalties over prediction markets

New York has sued Polymarket, alleging its US prediction market is an unlicensed gambling business operating across the state.On Sept. 24, Attorney General Letitia James asked a New York state court to stop QCX LLC, which operates as Polymarket US, from offering event contracts without a state gaming license and to order restitution, disgorgement, and potentially substantial penalties. The petition covers contracts tied to sports, elections, culture, and other events.The action targets a company that is also regulated at the federal level. QCX has been a Commodity Futures Trading Commission (CFTC)-designated contract market since July 2025, placing the lawsuit within a broader dispute over how federal derivatives oversight interacts with state gambling laws.New York says Polymarket contracts amount to gamblingNew York's case starts with the structure of Polymarket's contracts.Users buy contracts tied to the outcome of future events, with winning positions ultimately paying according to whether the specified event occurs. The state argues that because customers risk money on outcomes outside their control, the transactions meet New York's definition of gambling.The petition describe...