NEW YORK SUED POLYMARKET’S US ENTITY AS AN UNLICENSED GAMBLING BUSINESS — THE PETITION ASKS FOR THREE TIMES ITS GAIN AND $100,000 PER UNAUTHORIZED SPORTS OFFERING — POLYMARKET SAYS IT ANSWERS TO THE CFTC, NOT ALBANY

Letitia James filed a petition on September 24 in the Supreme Court of the State of New York, New York County, against QCX LLC, which trades as Polymarket US. The claim is that it runs an unlicensed gambling business. The statutes run from Executive Law 63(12) through five sections of the Penal Law, the Racing and Pari-Mutuel Wagering and Breeding Law, and the federal Wire Act.

Now the money. The petition asks for restitution to customers, an accounting of every bet and loss, disgorgement of all gains, a civil penalty of three times that gain under Penal Law 80.10, and another $100,000 for each unauthorized sports offering. It puts the business, with its parents and affiliates, at a reported value above $20 billion and United States revenue at well over $1 billion a year. Three times the gain on that base is not a fine. It is the company.

Polymarket’s answer is jurisdictional. It says its contracts are federally regulated event contracts under the CFTC and that a state gambling regulator has no business here. That argument is the whole fight and it is not really about prediction markets. It is about whether one federal license is a shield against fifty state ones.

Keep the shape of it in view. Polymarket settles in a stablecoin issued by a company that answers to regulators, on a venue that answers to regulators, and the only open question is which regulators. Bitcoin’s settlement never had that question, because nobody had to grant it. At the time of this writing, bitcoin was $84,086.