New York sues Polymarket US, seeking to shut it down as unlicensed gambling

New York asks a state court to close Polymarket's US exchange

New York sued Polymarket's U.S. exchange on Sept. 24, asking a state court to close it as an unlicensed gambling business and to take its profits.

Attorney General Letitia James filed the verified petition in the Supreme Court of the State of New York, New York County. The petition names QCX LLC, which does business as Polymarket US.

The filing brings eight causes of action under Executive Law § 63(12), the state's repeated-and-persistent-illegality provision. It cites the New York Constitution's gambling ban, Penal Law sections 225.05, 225.10 and 225.20, two sections of the Racing, Pari-Mutuel Wagering and Breeding Law, and the federal Interstate Wire Act.

What the petition asks the court to do

• A permanent injunction barring Polymarket US from operating without a license from the New York State Gaming Commission.
• A penalty of three times the company's gain.
• $100,000 for each offering or attempted offering of sports wagering.
• A full accounting of bets and customer losses, plus restitution, disgorgement and $2,000 in costs.

The petition states that Polymarket US is not licensed by the Gaming Commission in any capacity.

What Attorney General Letitia James said

James said in a statement released with Governor Kathy Hochul: "Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs."

The federal status the petition does not mention

QCX operates as a CFTC-designated contract market, a status Polymarket gained when it bought the exchange QCEX and returned to the U.S. market. The CFTC is the federal Commodity Futures Trading Commission. The U.S. platform launched in December 2025.

The petition does not mention the CFTC, the designation, or federal preemption.

An 18-to-20 age claim and an in-state college football game

Polymarket US "permits bettors under the age of 21, but at least 18 years of age to open an account," the petition alleges. It says this conflicts with a Racing Law provision that sets 21 as the minimum age for mobile sports wagering. The Polymarket app's App Store listing carries an 18+ age rating. The same allegation was the basis of New York's July 31 suit against Kalshi.

New York bars wagering on games involving in-state college teams. The petition cites contracts Polymarket US offered on the Sept. 3 football game between the University at Albany and the University at Buffalo, along with markets on the NBA Finals, Mets-Braves baseball and the February Super Bowl.

It also reproduces a July 6 trade by a New York bettor: 6.39 wagers on the Mets at roughly $0.46 each, $3.01 including a $0.10 fee, paying out $6.39 after the Mets won.

Marketing claims and the size of the business

The petition quotes Polymarket marketing on X reading "TRADE EVERY FOOTBALL GAME IN ALL 50 STATES," and an App Store claim of legality in all 50 states. That listing currently says Polymarket is "fully legal & CFTC regulated in the United States — in all 50 states," with a footnote excluding Nevada.

The petition says the business is valued at more than $20 billion and that its annualized U.S. revenue runs well over $1 billion. It attributes both figures to a news article filed as an exhibit.

Separately, DefiLlama tracks $4.28 billion in 30-day volume and $345 million in value locked on Polymarket's onchain markets. The article describes that as a separate venue from the CFTC-designated exchange named in the petition.

The Kalshi ruling and the CFTC's emergency order

Judge Analisa Torres of the U.S. District Court for the Southern District of New York rejected Kalshi's preemption argument on July 8, finding that the Commodity Exchange Act does not displace state gambling regulators. New York sued Kalshi three weeks later.

The CFTC then invoked emergency authority on Aug. 11, ordering KalshiEX to keep operating in New York. "Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws," CFTC Chairman Michael Selig said in that order.

The agency had already sued New York on April 24, seeking a declaratory judgment and permanent injunction against the state's enforcement. That case is pending in the same district. The CFTC has since brought similar suits against Kentucky and Wisconsin.

Other states act while appeals courts split

Connecticut ordered Polymarket and eight other platforms to stop offering sports event contracts on Sept. 10, and issued nearly 30 subpoenas to gaming service providers and media outlets.

Missouri Attorney General Catherine Hanaway sent cease-and-desist letters to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood on Sept. 18.

Appeals courts have split on the underlying question. The Ninth Circuit held in August that Kalshi's sports contracts are not swaps, parting with the Third Circuit.

What is confirmed

• New York filed the petition on Sept. 24 in the Supreme Court of the State of New York, New York County, naming QCX LLC, which does business as Polymarket US.
• The petition brings eight causes of action and asks for an injunction, three times the company's gain, $100,000 per sports wagering offering or attempted offering, an accounting, restitution, disgorgement and $2,000 in costs.
• The petition states that Polymarket US is not licensed by the New York State Gaming Commission in any capacity.
• QCX operates as a CFTC-designated contract market, and the U.S. platform launched in December 2025.
• The CFTC sued New York on April 24, and that case is still pending.
• Connecticut and Missouri have taken their own actions against prediction market platforms, and the Ninth and Third Circuits have reached different conclusions on Kalshi's sports contracts.

What is still unclear

• Polymarket had not published a response to the petition at the time of writing.
• The petition does not address the CFTC designation or federal preemption, so it is not known from the source how the court will handle that issue.
• The valuation and revenue figures in the petition come from a news article filed as an exhibit, not from company disclosures described in the source.

Why this matters

The case sets New York's gambling statutes against a federally designated derivatives exchange for the second time in two months. It is part of a broader dispute over whether platforms that hold a federal exchange designation must also follow state gambling rules. State regulators and the CFTC have taken opposing positions, and appeals courts have not agreed on whether sports event contracts count as swaps.

Sources

• The Defiant