After Coinbase, Gemini and Kalshi, New York Takes Its Prediction Market Fight to Polymarket

New York Attorney General Letitia James has filed a 33-page petition against QCX LLC, the company behind Polymarket US, seeking to halt its offering of contracts covering sports, elections, culture and other events to state residents without licences from the New York State Gaming Commission. No court ruling has been issued, and the restrictions sought by the state are not yet in effect.

The filing alleges that the platform has served New York customers with contracts on professional and college sports, political elections and entertainment. Investigators opened New York accounts and bought contracts linked to a Mets game and the elimination of a contestant on Big Brother, and they identified a market on the winner of the New York gubernatorial election. According to the petition, one other account placed more than five bets worth over $5,000 in a single day. New York cites that activity as support for separate alleged breaches of state penal law covering the operation of a gambling business and the possession of gambling records.

Age Limits Add to Potential Exposure

Should the court accept the state's position that Polymarket functions as a gambling platform, the company could face additional violations. It permits customers aged 18 and above to open accounts and lists contracts involving New York college teams, while licensed sportsbooks may take sports wagers only from customers aged 21 or older and are barred from offering bets on those teams.

Beyond shutting the platform down in the state, New York is asking Polymarket US to identify its customers and account for their bets, losses and the revenue generated by the alleged violations. The state is also pursuing restitution, disgorgement and a penalty equal to three times the company's alleged gains, plus an additional $100,000 for each sports contract offered or attempted.

QCX holds registration with the CFTC as a designated contract market, placing the matter inside a broader dispute over whether CFTC-regulated exchanges remain subject to state gambling statutes. Prediction-market operators maintain that the Commodity Exchange Act gives the CFTC exclusive jurisdiction, while states argue that a federal designation does not stop them from regulating contracts they view as wagering. Federal appeals courts have reached conflicting conclusions: the Third Circuit backed Kalshi in its fight with New Jersey, while the Ninth Circuit let Nevada enforce its gambling laws against the platform. The New York petition does not address QCX's DCM status, the CFTC or federal pre-emption, describing the contracts as wagers and relying on the state constitution, penal and racing laws and the federal Wire Act.

Polymarket Chief Legal Officer Neal Kumar said the company would "fight for our users," according to a statement reported by the Associated Press. Polymarket has yet to file a response, leaving both the reach of any injunction and its potential financial liability undetermined. The case follows New York's April suits against Coinbase and Gemini and a separate July action against Kalshi.