EvilCorporations.com — Corporate Accountability Project
Class Action Filed · Feb 2026
Polymarket’s $12 Billion Illegal Sportsbook Hidden in Plain Sight
How a crypto “prediction market” harvested over $6 billion in unlicensed sports bets from American consumers, dodged regulators, and exposed gamblers to addiction without a single legal safeguard.
TL;DR
Polymarket, a fintech company valued at $12 billion, has been operating an illegal online sportsbook in the United States while calling it a “prediction market” to evade state gambling laws. The platform processed over $6 billion in sports wagers, including $1.1 billion on the 2025 Super Bowl alone, without a single state gambling license. Real people lost real money on a platform that offered no addiction resources, allowed users as young as 18 to bet, and actively marketed itself as legal in all 50 states. A federal class action filed in February 2026 demands full restitution for every dollar lost on this unlicensed operation.
Polymarket made billions off the legal grey zone. Now it’s time to demand those losses back, and to hold every unlicensed platform accountable before more families are destroyed.
$6B+
Lifetime sports wager volume on Polymarket
$1.1B
Wagers on the 2025 Super Bowl alone
$12B
Polymarket’s current valuation
$1.4M
CFTC civil penalty paid in 2022
50
States Polymarket openly marketed illegal betting in
2.5M
U.S. adults with severe gambling disorders
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The Allegations: A Breakdown
Core Allegations
What they did · 6 points
| 01 | Polymarket operated an unlicensed online sportsbook across all 50 U.S. states, disguising bets on NFL, NBA, college sports, and other events as “event contracts” on a so-called “prediction market” to evade state gambling laws. | high |
| 02 | The platform processed over $6 billion in sports-related wagers, with sports betting comprising more than half of all bets placed and achieving the highest transaction velocity of any category on the platform. | high |
| 03 | Polymarket marketed its platform as legal in all 50 states through social media, including an Instagram account with 409,000 followers dedicated to its sports gambling operation, using slogans like “Trade Every Football Game in All 50 States.” | high |
| 04 | Polymarket offered point spreads, over/unders, player props, and parlays, all betting structures functionally identical to those at licensed sportsbooks, while claiming its platform was legally distinct from gambling. | high |
| 05 | The CFTC fined Polymarket $1.4 million in 2022 and ordered it to cease U.S. operations. The company resumed targeting U.S. consumers after that shutdown, without obtaining the required state gambling licenses. | high |
| 06 | Plaintiff Lorenzo Miro San Diego wagered and lost thousands of dollars on Polymarket between September and November 2025, relying on the company’s representations that the platform was a legal venue for sports betting. | med |
Regulatory Failures
How oversight broke down · 5 points
| 01 | Despite a 2022 CFTC enforcement order requiring Polymarket to wind down all U.S. markets and pay a $1.4 million penalty, the company returned to the U.S. market without obtaining the state licenses required by New York, California, or any other state. | high |
| 02 | The Nevada Gaming Control Board filed a civil enforcement action against Polymarket on January 16, 2026, seeking an injunction to halt its unlicensed wagering operations. Tennessee issued a formal cease-and-desist letter on January 9, 2026. | high |
| 03 | New York’s Racing, Pari-Mutuel Wagering and Breeding Law explicitly prohibits operating an unlicensed sports wagering platform, yet Polymarket ran its operations from New York City headquarters and actively marketed to New York consumers. | high |
| 04 | Polymarket offered bets on New York college sports teams, including Syracuse University, in direct violation of a New York law prohibiting in-state wagering on New York college sports. | med |
| 05 | California’s Attorney General had previously concluded that similar “event contracts” constitute unlawful gambling under state law, yet Polymarket continued accepting deposits from California users through 2025 and 2026. | high |
Profit Over People
Revenue prioritized over ethics · 5 points
| 01 | Polymarket used its illegal sports gambling revenue to reach a $12 billion valuation, making it one of the most valuable fintech companies in the U.S. while openly operating outside the law. | high |
| 02 | Sports betting surpassed all other categories on the platform in both volume and transaction velocity, making illegal gambling the company’s primary growth engine. | high |
| 03 | Polymarket retained guaranteed transaction fees from every wager placed, meaning the company profited from each bet regardless of outcome, structurally incentivizing maximum user wagering. | med |
| 04 | CEO Shayne Coplan publicly promoted the platform as a legal alternative to traditional sportsbooks, comparing shares to stocks, while knowingly operating without the licenses required by state law. | high |
| 05 | The platform’s interface was deliberately designed to emphasize potential winnings in prominent visuals while downplaying costs and odds, employing the same psychological design hooks used by predatory digital gambling platforms. | med |
Public Health and Safety
Addiction risks, zero safeguards · 6 points
| 01 | Gambling addiction has reached crisis levels in the U.S., with approximately 2.5 million adults suffering from severe gambling disorders. Individuals with gambling disorders are 15 times more likely to die by suicide than the general population. | high |
| 02 | Polymarket allegedly allowed anyone over 18 to gamble on its platform, in direct violation of New York law, which prohibits gambling for anyone under 21. | high |
| 03 | Polymarket allegedly failed to post required problem gambling assistance messages or provide access to New York’s Voluntary Self-Exclusion Program, leaving vulnerable users with no recourse when addiction took hold. | high |
| 04 | Between 2018 and 2021, the risk of gambling addiction in the U.S. grew by 30%. The National Problem Gambling Helpline saw a 45% surge in contacts between 2021 and 2022. Unlicensed platforms like Polymarket operate outside the systems designed to address this crisis. | med |
| 05 | Young men are disproportionately harmed: 10% of young men exhibit gambling addiction behaviors, compared to 3% of the general population. Online platforms with gamified design, like Polymarket, are identified as key contributors. | high |
| 06 | Polymarket’s platform employed addictive design features, including rapid wagering mechanics and loss-chasing incentives, while providing none of the required safeguards mandated by state law for licensed operators. | high |
Corporate Accountability Failures
How Polymarket sidestepped responsibility · 5 points
| 01 | After the 2022 CFTC fine and shutdown, Polymarket returned to the U.S. market through a $112 million acquisition, treating the federal penalty as a cost of doing business rather than a reason to comply with the law. | high |
| 02 | Polymarket structured its U.S. operations across three separate corporate entities in Delaware, Panama, and Florida, creating layers of legal complexity that made it harder for regulators and consumers to hold the company accountable. | high |
| 03 | By operating without a license, Polymarket avoided the taxes paid by lawful sportsbook operators, giving itself an illegal competitive advantage over compliant businesses. | med |
| 04 | The company continued aggressive social media marketing campaigns to recruit new users even after receiving cease-and-desist letters from multiple state regulators. | high |
| 05 | No executive has faced personal legal liability for the company’s repeated, knowing violations of state and federal gambling laws. The proposed class action seeks full disgorgement of all ill-gotten profits. | med |
The Language of Legitimacy
How “prediction market” laundered an illegal sportsbook · 4 points
| 01 | Polymarket branded its sports wagers as “event contracts,” using the technical language of commodity trading to reframe illegal gambling as a lawful financial instrument, despite the fact that payouts depended entirely on sports outcomes. | high |
| 02 | CEO Shayne Coplan appeared on 60 Minutes and other outlets positioning Polymarket as a legitimate forecasting tool, building public trust while the company simultaneously ran an unlicensed sportsbook generating billions in wagers. | med |
| 03 | The term “trading” was substituted for “betting” in all public-facing marketing, including social media ads, app store listings, and press materials, deliberately masking the gambling nature of the product from regulators and consumers. | high |
| 04 | Polymarket’s marketing used prominent fonts, bold winnings displays, and aspirational language to create an impression of legality and legitimacy, while burying or omitting any disclosure that the platform operated outside state gambling law. | med |
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Timeline of Events
2020
Polymarket founded by Shayne Coplan in New York, launching as a “prediction market” platform for event contracts.
2022
CFTC enters an order against Polymarket, requiring a $1.4 million civil monetary penalty and ordering the platform to wind down all U.S. markets. Polymarket ceases U.S. operations.
Oct 2023
New York Gaming Commission adopts Rule 5602.1(a)(4), explicitly outlawing proposition betting and contests that mimic such betting, directly applicable to Polymarket’s offerings.
Oct 2025
New York State Gaming Commission sends Kalshi, Polymarket’s direct competitor, a cease-and-desist letter. Polymarket, operating virtually identical products, receives no equivalent warning despite continued operations.
Nov 2025
Polymarket raises capital at a $12 billion valuation. Lifetime sports betting volume surpasses $6 billion. The platform is actively recruiting users in all 50 states with no gambling licenses.
Jan 9, 2026
Tennessee Sports Wagering Council issues a formal cease-and-desist letter to Polymarket, ordering it to stop offering sports event contracts to state residents, refund deposits, and void open contracts.
Jan 16, 2026
Nevada Gaming Control Board files a civil enforcement action against Polymarket, seeking a court declaration and injunction to halt its unlicensed wagering operations in Nevada.
Feb 2, 2026
Polymarket’s website is captured actively displaying bets on New York college sports teams, including Syracuse University, in violation of New York state law.
Feb 4, 2026
Federal class action complaint filed in the Southern District of New York by plaintiff Lorenzo Miro San Diego on behalf of all U.S. consumers who lost money on Polymarket’s illegal sportsbook.
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Direct Quotes from the Legal Record
QUOTE 1
The core fraud described plainly
Core Allegations
“This case arises out of Defendants’ operation of an illegal online sports gambling platform that is marketed as a ‘prediction market,’ but in reality, is an unlicensed sports betting enterprise prohibited under various state laws.”
💡 The complaint cuts through the corporate branding immediately: the “prediction market” label is a legal costume, not a substantive distinction.
QUOTE 2
$6 billion in illegal sports bets
Profit Over People
“The platform’s lifetime sports-related contract volume has surpassed $6 billion, with the 2025 Super Bowl alone generating $1.1 billion in wagers, underscoring the big shift over the last 12 months from politics to sport.”
💡 These numbers make clear that sports betting is not an incidental feature. It is the business, conducted at a scale that dwarfs many licensed sportsbooks.
QUOTE 3
Marketing illegal betting in all 50 states
The Language of Legitimacy
“Polymarket has expressly repositioned itself as a nationwide sportsbook (at least for now), open to users in all 50 states, while consciously operating without the state licensure required to offer sports betting.”
💡 The parenthetical “at least for now” is telling: this is not an accident or an oversight. It is a deliberate national expansion strategy built on illegality.
QUOTE 4
No consumer protections whatsoever
Public Health and Safety
“Unlike licensed casinos and sportsbooks, which must comply with strict requirements to ensure fairness, transparency, and consumer protections, Defendants operate without these safeguards. The absence of oversight leaves players vulnerable to unfair practices, such as manipulated game outcomes, misleading promotions, and nonexistent or inadequate mechanisms to address problem gambling.”
💡 Every consumer protection rule that exists to prevent gambling addiction, protect minors, and ensure fair play simply did not apply on Polymarket.
QUOTE 5
Age 18 allowed to gamble when law requires 21
Public Health and Safety
“Upon information and belief, Defendants allows anybody over the age of 18 to gamble on their platform in complete disregard for the laws prohibiting individuals under the age of 21 to gamble in New York.”
💡 Polymarket deliberately set a lower age gate than state law requires, exposing the most vulnerable young bettors to an addictive, unregulated platform.
QUOTE 6
CEO’s own words confirm the deception
The Language of Legitimacy
“Unlike a betting site where you make a bet and it’s against the house, here you own a share. You could almost say it’s similar to a stock, but it’s not a stock.”
💡 Coplan’s own statement on 60 Minutes confirms he knew the product was legally ambiguous. The hedge (“but it’s not a stock”) signals he understood the platform could not withstand legal scrutiny as either a genuine financial instrument or a legitimate prediction market.
QUOTE 7
Addictive design used to exploit users
Public Health and Safety
“Defendants’ conduct is deceptive because it 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.”
💡 This is not negligence. The complaint alleges deliberate targeting of people prone to gambling addiction as a growth strategy.
QUOTE 8
Returning after federal enforcement as strategy
Corporate Accountability Failures
“Polymarket has now resumed offering its platform to U.S. consumers. In doing so, it continues to operate without proper licensing or regulatory oversight, effectively perpetuating the same unregulated activities that previously prompted federal enforcement.”
💡 Paying the 2022 fine and returning anyway reveals that Polymarket calculated the penalty was worth bearing to access the U.S. market illegally.
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Commentary
What exactly did Polymarket do wrong?
▾
Polymarket built and operated a full-scale online sportsbook, offering point spreads, over/unders, parlays, and player props on NFL, NBA, college, and other sports. It accepted real money from users and paid out real winnings. Under state law in New York, California, Nevada, Tennessee, and dozens of other states, doing this without a gambling license is illegal. Polymarket had no such license in any state. It marketed itself as a “prediction market” to create the appearance of legality, but the lawsuit argues that label is purely cosmetic and that the platform is, by any substantive measure, an unlicensed sportsbook. Real people lost real money on a platform that operated with none of the safeguards the law requires.
Isn’t this lawsuit just a technicality about licensing?
▾
No. Licensing requirements exist specifically to protect people. Licensed sportsbooks must verify age (21 and over in New York), post addiction helplines, provide access to voluntary self-exclusion programs, undergo audits, and pay taxes that fund public services. Polymarket did none of this. The complaint alleges the platform allowed 18-year-olds to gamble, provided no problem gambling resources, and used addictive interface design to maximize betting. The “technicality” is the entire protective framework that separates legal gambling from predatory exploitation.
How did Polymarket get to $12 billion in value while doing this openly?
▾
Polymarket benefited from the speed gap between innovation and regulation. The company moved fast, raised capital, achieved massive scale, and generated billions in wager volume before enforcement actions could catch up. It also leveraged the genuine legal complexity around crypto-adjacent “event contracts” to create plausible deniability. The CFTC fined it in 2022, it simply waited and returned. By the time state regulators filed enforcement actions in late 2025 and early 2026, Polymarket had already extracted billions in fees from U.S. consumers. That is not innovation. That is regulatory arbitrage at scale.
Who was most harmed by Polymarket’s illegal operation?
▾
The people most harmed are the ones who could least afford it: individuals who believed they were using a legal platform, who had no idea that no addiction safeguards existed, who may have been under 21, and who had no legal recourse through normal channels because Polymarket was not subject to the oversight that legitimate sportsbooks face. The complaint notes that gambling addiction is disproportionately severe among young men, with 10% exhibiting addictive behaviors compared to 3% of the general population. These are the exact demographics Polymarket targeted through social media marketing.
Does the “prediction market” label actually change anything legally?
▾
According to multiple state regulators and the complaint, no. New York law defines gambling as staking something of value on a future contingent event not under your control, with the expectation of receiving something of value if you win. Betting on an NFL game through Polymarket meets that definition exactly, regardless of whether the bet is called an “event contract” or a “yes/no share.” The CFTC previously concluded that Polymarket’s contracts required regulatory approval. Calling it a prediction market is, as the complaint states, “purely cosmetic.”
What can I do if I lost money on Polymarket?
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If you are a U.S. resident who lost money wagering on Polymarket’s sports markets, you may be eligible to join the class action. The lawsuit seeks full recovery of all money lost plus attorneys’ fees. Contact class action attorneys Shamis and Gentile or Edelsberg Law for information about joining the class. You can also file a complaint with your state gaming commission or attorney general’s office. Every complaint strengthens the regulatory case and helps ensure Polymarket faces real consequences for its conduct.
What can I do to prevent this from happening again?
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Several concrete actions matter. Contact your state legislators and demand they close the “event contract” loophole that platforms like Polymarket exploit. File complaints with the CFTC, your state attorney general, and your state gaming commission about any unlicensed gambling platform you encounter. Support organizations like the National Problem Gambling Helpline (call or text 1-800-522-4700) that provide resources for those harmed by gambling addiction. Share this case and others like it. Regulatory agencies act faster when public pressure amplifies legal action. The 2022 CFTC fine did not stop Polymarket. Only sustained regulatory, legal, and public accountability will.
Why did states take so long to act, and what does that tell us about corporate power?
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Polymarket grew from zero to a $12 billion company in six years, operating in a regulatory gap created by the novelty of crypto-based “event contracts.” Regulators are chronically underfunded, outpaced by technology, and subject to intense lobbying from the fintech industry. This is not an accident: companies like Polymarket deliberately exploit the time it takes for regulation to catch up. By the time Nevada filed its enforcement action in January 2026, Polymarket had already processed billions in illegal bets. The lesson is clear: voluntary corporate compliance does not work when the profit motive is large enough. Stronger pre-approval requirements, real penalties, and personal executive liability are the only tools that will change behavior.
Source note: All information on this page is derived from the class action complaint filed February 4, 2026, in the U.S. District Court for the Southern District of New York (Case No. 1:26-cv-00973). The allegations described herein are claims made in that complaint. Defendants deny wrongdoing. This article does not constitute legal advice.
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