Polymarket faces New York lawsuit over unlicensed gambling allegations
CIE News ·
New York Attorney General Letitia James sued Polymarket US, alleging it operates an unlicensed gambling business. Polymarket argues state claims are preempted by federal CFTC authority.
New York Attorney General Letitia James and Governor Kathy Hochul announced a lawsuit against QCX LLC, operating as Polymarket US, alleging the platform runs an illegal, unlicensed gambling operation in the state. According to ag.ny.gov, the lawsuit seeks an order halting operations, user restitution, forfeiture of illegal gains, and civil fines equal to three times the platform's gains.
The state claims Polymarket permits users between ages 18 and 20 to trade event contracts despite New York requiring mobile sports bettors to be at least 21 years old. In response, Polymarket Chief Legal Officer Neal Kumar contended in filings before the Manhattan federal court and the U.S. Supreme Court that state enforcement actions are foreclosed by federal law and Commodity Futures Trading Commission jurisdiction.
The regulatory battle comes as the CFTC proposed on October 9 to include sports event contracts within its swap definition, while excluding casino games. Amicus interventions, including from the NFL, highlighted that sports prediction markets generated $1.8 billion of $3.3 billion in trading volume on the NFL's opening Sunday alone.