Polymarket Gambling Lawsuits To Be Consolidated Into Single Class Action

Lawsuits allege Polymarket operates an unlicensed online sportsbook, while marketing the platform as a legal way to bet on sports nationwide.

A federal judge has determined that two proposed class action lawsuits accusing Polymarket of operating an illegal online gambling platform should proceed as a single case, finding the actions involve nearly identical allegations that the company disguised an unlicensed sportsbook as a “prediction market.”

In an order (PDF) issued in the U.S. District Court for the Southern District of New York on June 12, Judge Margaret M. Garnett indicated that Polymarket lawsuits filed by Lorenzo Miro San Diego and Alexander Yoon should be combined into one class action, ordering lawyers to file a consolidated complaint by June 25.

Diego and Yoon both claim Polymarket illegally accepted sports wagers nationwide without required state licenses, causing users to lose thousands of dollars. The court determined that the class action claims each share common questions of fact and law, such that consolidation will promote judicial efficiency.

Online Gambling Lawsuits

Polymarket describes itself as the “World’s Largest Prediction Market,” allowing users to purchase “Yes” or “No” contracts based on the outcomes of sporting events. However, lawsuits allege the platform functions much like a conventional online sportsbook, offering wagers on point spreads, moneylines, over-under totals, proposition bets and parlays across professional and college athletics.

In recent years, online sportsbooks have faced criticisms that have resulted in numerous DraftKings lawsuits, FanDuel lawsuits and claims against other online betting sites, such as BetMGM and Caesars. Much of the scrutiny has centered upon allegations that the platforms target younger users through “risk-free” wagers, promotional bonuses and game-like features that encourage frequent participation. Critics claim these platforms are intentionally designed to promote impulsive betting, repeated play and prolonged user engagement.

As a result, sports betting addiction lawsuits are being filed by users who claim they developed compulsive gambling behaviors after using the apps. The complaints contend that major sportsbook operators employed deceptive marketing strategies and addictive platform designs that contributed to severe financial losses and emotional harm, particularly among college students and young adults.

Polymarket Class Action Lawsuit Allegations

The two Polymarket gambling lawsuits, which were filed separately in February, name Blockratize Inc., Adventure One QSS Inc. and QCX LLC as defendants. They allege the companies operate Polymarket as an unlicensed online sportsbook while falsely marketing the platform as a legal prediction market.

According to the complaints, Polymarket allows users to wager real money on the outcomes of sporting events, player performances, point spreads, over-under totals and parlays in a manner plaintiffs claim is virtually indistinguishable from traditional sportsbooks. The lawsuits allege the company adopted the “prediction market” label solely to avoid gambling regulations while continuing to profit from sports betting.

Diego and Yoon each contend Polymarket aggressively marketed the platform as a legal way to bet on sports in all 50 states, despite allegedly operating without the state licenses required to offer online sports wagering. The complaints point to social media advertisements and promotional campaigns encouraging users nationwide to place sports bets through the platform.

The lawsuits also cite prior regulatory action against the company, noting Polymarket previously agreed to pay a $1.4 million civil penalty to the Commodity Futures Trading Commission in 2022 and temporarily ceased U.S. operations before later returning to the market. The complaints further reference recent enforcement actions by gaming regulators in Nevada and Tennessee challenging Polymarket’s sports betting operations.

In his complaint (PDF), Diego alleges he incurred thousands of dollars in Polymarket gambling losses between September and November 2025 after relying on representations that the platform offered legal sports betting. He claims he would not have used the platform had he known the alleged gambling operation violated state laws.

“Plaintiff was harmed because Defendants took Plaintiff’s money due to their unlawful, false, unfair, and deceptive misrepresentations of their product, including the product Plaintiff utilized.”

— Lorenzo Miro San Diego v. Blockratize Inc. et al.

The proposed Polymarket class action lawsuits each seek to recover money allegedly lost by users wagering on the platform, along with injunctive relief preventing the company from continuing the challenged business practices. The complaints assert claims under New York gambling and consumer protection laws, California unfair competition statutes and common law unjust enrichment.

Along with consolidating the lawsuits, Judge Garnett has established a schedule for the next phase of the litigation, including briefing on an anticipated motion by defendants seeking to compel arbitration. The court also denied, without prejudice, a joint request to appoint interim co-lead class counsel, finding the parties had not provided sufficient information addressing the factors required under the Federal Rules of Civil Procedure.

Sports Betting Lawsuits

Although the Polymarket lawsuits focus on whether the platform illegally operated as an unlicensed sportsbook, they come amid broader legal scrutiny over the rapid expansion of online sports betting and its impact on young users.

Sports betting addiction lawsuits are being investigated for individuals between the ages of 18 and 30 who incurred more than $10,000 in gambling-related losses after using online platforms such as:

Sports gambling lawyers are investigating claims on behalf of young adults and college students nationwide who developed compulsive gambling behavior and suffered financial harm that may have been preventable.

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