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- New York officials petitioned a local court to halt a prediction market operator for lacking state gaming licenses.
- Authorities allege the platform illegally offered sports wagering to users under twenty one and seek severe financial penalties.
New York Attorney General Letitia James has asked a court to stop Polymarket US from offering prediction market contracts in the state without New York gaming licenses.
The filing targets QCX LLC, the operator of Polymarket US, and seeks financial remedies including restitution, disgorgement and penalties. The case matters beyond New York because it adds to a broader legal fight over whether platforms regulated by the Commodity Futures Trading Commission can still be subject to state gambling laws, especially when they offer sports-related contracts.
Petition centers on sports, elections and entertainment contracts
According to the state’s 33-page petition, Polymarket US offered contracts tied to professional and college sports, political elections, entertainment and other events. Investigators using New York accounts allegedly bought contracts linked to a New York Mets game and the elimination of a contestant from Big Brother. The petition also says investigators identified a market on the winner of the New York gubernatorial election.
New York argues that activity supports alleged violations of state penal law involving the operation of a gambling business and the possession of gambling records. The state is also asking the court to require Polymarket US to identify its customers and provide an accounting of bets, losses and revenue tied to the alleged violations.
One account, according to the petition, placed more than five bets totaling over $5,000 in one day.
No court ruling has been issued, and the requested restrictions are not yet in force.
Why New York says the platform differs from licensed sportsbooks
The petition highlights differences between Polymarket US and licensed New York sportsbooks. New York says Polymarket allows customers aged 18 to open accounts, while licensed sportsbooks in the state may accept sports wagers only from customers aged 21 or older. The filing also says Polymarket offered contracts involving New York college teams, which licensed sportsbooks are not allowed to take bets on in the state.
If the court accepts New York’s argument that Polymarket operates as a gambling platform, QCX could face additional violations. For sports contracts, the state has requested an added $100,000 for each offer or attempted offer of unauthorized wagering. It is also seeking a penalty equal to three times the company’s alleged gains.
Broader clash over prediction markets and state gambling law
The New York action follows other recent cases involving prediction-market platforms. The state sued Coinbase and Gemini in April and brought a separate case against Kalshi in July over event contracts.
QCX is registered with the CFTC as a designated contract market. Prediction market operators have argued that the Commodity Exchange Act gives the CFTC exclusive jurisdiction, while states have argued that federal designation does not block state gambling enforcement.
Federal appeals courts have split on that question. The Third Circuit sided with Kalshi in its dispute with New Jersey, while the Ninth Circuit allowed Nevada to enforce its gambling laws against Kalshi.
The New York petition does not address QCX’s designated contract market status, the CFTC or federal pre-emption. Polymarket Chief Legal Officer Neal Kumar said the company would “fight for our users.”
What comes next is whether QCX responds in court, and whether a judge grants any injunction sought by New York.
Source: As reported by Tanya Chepkova.
