Polymarket, DraftKings accused of violating South Carolina ban on sports betting

The plaintiff claims the prediction markets offer sports betting to South Carolinians under the guise of selling event contracts.CHARLESTON, S.C. (CN) — A lawyer is taking aim at Polymarket and other prediction markets he claims are violating South Carolina’s anti-gambling laws.Attorney James M. Hughes of Motley Rice in Mt. Pleasant says in a complaint filed Wednesday in Charleston County that Polymarket and DraftKings Predictions illegally offer sports betting to South Carolinians under the guise of selling event contracts.“This lawsuit is premised on a straightforward thesis: The rhetorical set dressing of ‘prediction markets’ and event contracts’ doesn’t change reality,” Hughes says in the complaint. “And reality is quite simple. Defendants incite, offer, and collect winnings from illegal wagers placed by South Carolinians on the outcome of sporting events.”Sports betting has been illegal in South Carolina since 1912.Hughes accuses the prediction markets and related companies of fueling a gambling addiction epidemic, particularly among young sports bettors. He cites a study that found that almost 60% of 18- to 22-year-olds gamble on sports each year. Of those, 10% gamble each week and 4% gamble daily.“But problem gambling is just one of the harms caused by defendants’ illegal conduct,” Hughes says in the complaint. “Even bettors who do not struggle with problem gambling face serious financial ramifications from placing bets in a system that is fundamentally rigged against them.”Hughes is suing the prediction markets, as well as related exchanges, clearinghouses and market makers, under S.C. statute 32-1-10, a colonial-era law that allows any individual within the state to recover losses greater than $50 from illegal bets made within the past three months, plus damages.Any recovery from the suit is split between the plaintiff and the counties where illegal bets were placed.Hughes isn’t the first to accuse prediction markets of violating the state’s strict anti-gambling laws. South Carolina Gambling Recovery, a Delaware-based company, sued Kalshi and Robinhood Markets, two other prediction markets, in June 2025 in Oconee County claiming violations of state and federal laws.That case was removed to federal court, where the plaintiff filed an unopposed motion for a stay this past May pending the outcome of similar cases before the appellate courts.The Third Circuit ruled in Kalshi’s favor in April when it upheld a preliminary injunction preventing enforcement of New Jersey’s gambling laws against the prediction market’s federally regulated contracts. That same month, the Sixth Circuit denied an emergency injunction from Kalshi seeking to stop Ohio from enforcing its anti-gambling laws.The Trump administration has thrown its support behind the prediction markets. The Commodity Futures Trading Commissionfiled a briefing in the Ninth Circuit supporting Kalshi in a dispute with the Nevada’s Gaming Control Board.Defendants named in Wednesday’s suit include the Chicago Mercantile Exchange, North American Derivatives Exchange, Bitnomial Clearinghouse, Wintermute Trading and Virtu Financial.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads