New York state filed a lawsuit against Polymarket U.S. on Sept. 24, seeking to shut down the prediction market platform and reclaim its profits. Attorney General Letitia James named QCX LLC, which operates Polymarket U.S. in a verified petition filed in New York State Supreme Court.
Polymarket responded the same day by filing a civil lawsuit in U.S. District Court for the Southern District of New York against Attorney General James and New York State Gaming Commission officials. The company also moved to transfer the state court action to federal court.
James said Polymarket targets vulnerable individuals and deprives New York families of critical services by circumventing state laws. Governor Kathy Hochul characterized the platform as an unlicensed gambling operation that knowingly violates state law and places New Yorkers—particularly minors—at risk.
Polymarket's federal suit argues that states lack authority to regulate event contracts, which it classifies as federally regulated swaps. The company's filing states it seeks to prevent "imminent and irreparable harm arising from New York's enforcement of state gambling laws against federally regulated derivatives exchanges — enforcement Congress has expressly prohibited."
Polymarket's legal filing describes New York's characterization of federally regulated event-contract trading as unregulated gambling as erroneous. The dispute reflects a broader national conflict over whether state or federal authorities control jurisdiction over sports-based event contracts on prediction markets.
Two months earlier, New York filed a similar action against Kalshi, a Polymarket competitor. The Commodity Futures Trading Commission, the federal regulator overseeing prediction market platforms, oversees Polymarket U.S.
The CFTC has previously sued states, asserting exclusive regulatory authority over these markets. The agency did not immediately comment on the New York lawsuit.
New York's lawsuit seeks penalties of three times any Polymarket gains, plus $100,000 for each instance of sports wagering or mobile sports wagering in the state. The filing also demands a full accounting of all platform trades, user losses, and total Polymarket revenue.
Polymarket U.S. launched in December 2025. The company operates a separate offshore platform established in 2020. Polymarket was founded in a Manhattan apartment and now employs more than 350 people in New York.
