in Newswire Published on February 10, 2026

Polymarket Runs Illegal Online Sports Betting Platform, Class Action Lawsuit Alleges

Diego v. Blockratize Inc. et al.

Filed: February 4, 2026 ◆§ 1:26-cv-00973

A class action lawsuit claims that Polymarket skirts gambling and sportsbook regulations by misrepresenting itself as a ‘predictions market.’

Defendant(s)

Blockratize, Inc. Adventure One QSS, Inc. QCX LLC

Law(s)

New York General Business Law California Unfair Competition Law California Consumers Legal Remedies Act New York General Obligation Law

State(s)

New York

Categories

Sports Entertainment False Advertising Fraud

A proposed class action lawsuit claims that Polymarket’s “prediction market” platform is, in reality, an unlicensed sports betting enterprise not governed by state and federal regulations designed to protect consumers.

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The 46-page lawsuit contends that although Polymarket touts its prediction market as a place where users can wager on the outcome of myriad different events, including sports, the manner in which the market operates is “virtually indistinguishable” from any typical online casino and sportsbook, given that users wager using real-world currency.

The filing claims that Polymarket has falsely described its prediction market as a way to sidestep regulatory scrutiny. According to the class action lawsuit, Polymarket has routinely misrepresented its product and repeatedly misled consumers, so as to “mask the reality that the platform facilities and profits from illegal gambling,” with sports betting consistently ranking as the highest bet-upon sector on Polymarket.

Per the complaint, the main difference between the Polymarket platform and any other sportsbook is that the wagers consumers place through Polymarket are considered “event contracts,” effectively an agreement of payment contingent upon whether an event actually occurs. The filing relays that Polymarket claims that its event contracts are akin to owning a share in an economic hedging function, where the company only profits from transaction fees and not customer losses.

The lawsuit takes issue with Polymarket’s alleged noncompliance with state-specific and federal gambling laws designed to ensure fairness, transparency, and consumer protection. The case argues that Polymarket has not only violated New York gambling protection laws but also a number of other gambling safeguards in other states.

“By presenting its sports betting platform as lawful and accessible, Polymarket exposes consumers to financial risk while evading the regulatory and statutory safeguards intended to protect them,” the suit asserts.

Polymarket is supposedly able to get away with its alleged deception through its branding as a “predictions market” and not a gambling enterprise where sports betting is a mere byproduct. The complaint claims this designation allows the company to evade traditional sports gambling laws, even though Polymarket allegedly collects a “substantial portion” of its multi-billion dollar revenue through wagers placed on sports.

“Defendants’ conduct … is designed to encourage illegal gambling while marketing the platform as a legal avenue to engage in sports betting, as well as to exploit psychological triggers associated with gambling and addiction in order to target susceptible populations,” the suit asserts.

The Polymarket class action lawsuit looks to represent all United States residents who spent money wagering on Polymarket’s mobile or web sportsbook during the applicable statute of limitations period.

Check out ClassAction.org’s lawsuit list for current class action lawsuits.

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