New York Crackdown on Online Gambling Comes as Regulators Tighten Oversight Over Growing Risks

25 September 2026

The New York Attorney General and Governor this week sued Polymarket US for allegedly operating as an unlicensed online gambling business, one of a wave of regulatory actions targeting digital wagering. The crackdown comes as experts warn that online gambling poses growing risks for consumers and challenges for oversight.

Online gambling can enable faster, higher-stakes losses and is a prime target for fraud – a report from 2026 warned that digital betting risks users losing their money with even less friction than in-person gambling. A study from the same year found evidence of significant individual and public-health harms from online gambling, including links to anxiety, depression, substance abuse, and addiction.

The New York lawsuit against QCX LLC d/b/a Polymarket claims the operator failed to obtain a state license and allowed users in their late teens to place bets in violation of the required minimum age. The 2025-launched platform is alleged to have facilitated wagers on sporting events, elections, and other outcomes. New York seeks to block Polymarket's alleged illegal operation, order restitution, and impose fines.

Regulatory Expansion

It's not the first time a prediction market has faced scrutiny. In 2026, two months before the New York action, the same state sued a competitor, Kalshi – a company that let Americans wager on US elections. Several other states have also moved to sanction the new online gambling venues, including Arizona, Massachusetts, and Nevada.

Noncompliance concerns also extend beyond the U.S. Australia's regulator, the ACMA, in 2026 issued warnings to licensed operators for failing to adhere to their obligations, specifically the BetStop self-exclusion rules. Since 2019, the ACMA has blocked hundreds of unreported Australian-owned betting affiliate sites.

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That same year, in Brazil, the government signalled it may restrict operators further than the country's existing licensing system, which included levying a 12% cut on revenue for an R$ 30 million five-year license since moving to a regulatory regime in 2025. And in India, a 2025 law bans all online gaming under the guise of recreational sport.

With opportunities for online gambling proliferating, harm-prevention researchers have warned of a complex landscape for consumer protection. A 2023 article in the journal PLOS One found that the online gambling environment encourages over-exposure, through targeted marketing, grey-market sites, and addictive design. A publication from the Council of Europe the following year detailed the harms, including mental-health impacts, addiction, and debt.

Amid the warnings, there are also safeguards. Gambling management tools on the platforms themselves -- real-time reality checks, deposit limits, and mandatory time-outs -- when used, give users breathing room from the games. But as of a recent survey, just 30% of UK online gamblers said they were using such tools.