Prediction markets · Regulatory update

New York Sues Polymarket US, Widening Its Prediction-Market Fight

The attorney general's suit against Polymarket's US exchange follows New York's $36 billion case against Kalshi, and Polymarket has countersued in federal court.

By Fact-checked by Standards Editor (position open) Last updated
What happened
On September 24, 2026, Attorney General Letitia James and Governor Kathy Hochul announced New York's lawsuit against QCX LLC, the CFTC-registered exchange that does business as Polymarket US. Polymarket has countersued in federal court.
Why it matters
New York is now suing both Kalshi and Polymarket US, the two best-known US prediction-market exchanges, while the CFTC is suing New York over the same issue.
Who is affected
Polymarket US users in New York first. Users elsewhere could feel indirect effects if the case produces a court order or adds to the case law against the platforms.
What happens next
Polymarket's countersuit is pending in the Southern District of New York (No. 1:26-cv-08345, per a docket tracker), and Kalshi's New York appeal is in the Second Circuit. We will update this article if a court restricts Polymarket US in New York.

The defendant is QCX LLC, which runs Polymarket US: the CFTC-registered exchange the Polymarket group launched for American users, separate from the global crypto-based Polymarket site. The suit comes eight weeks after New York sued Kalshi.

What New York is doing

This is New York’s fourth major action against prediction-market platforms in under a year.

Date Action
October 24, 2025 State Gaming Commission sends Kalshi a cease-and-desist
April 22, 2026 Attorney general sues Coinbase Financial Markets and Gemini Titan
July 31, 2026 Attorney general and governor sue Kalshi, seeking at least $36 billion
September 24, 2026 Attorney general and governor sue Polymarket US (QCX LLC)

We have summarized the Polymarket suit from the attorney general’s announcement and have not reviewed the complaint itself. For the specific claims and remedies sought, read the complaint linked from that release.

Polymarket’s countersuit

Polymarket filed its own case against New York in the U.S. District Court for the Southern District of New York (No. 1:26-cv-08345), according to the Vultax docket tracker. Platforms have used the same move in other states, asking a federal judge to hold that federal commodities law preempts state gambling rules.

That approach has a weak record in New York so far. The same federal court refused to give Kalshi a preliminary injunction against New York on July 7, 2026. Kalshi’s appeal is pending in the Second Circuit.

The federal-state collision in New York

New York is also one of nine states the CFTC itself has sued over prediction markets. After New York sued Kalshi, the CFTC used its emergency authority on August 11, 2026 to direct Kalshi to keep operating in line with the Commodity Exchange Act’s core principles. In other words, New York is litigating against platforms while the federal regulator litigates against New York.

The broader preemption question is now in front of the Supreme Court (our explainer), and the day after New York filed, the Sixth Circuit added another appellate loss for Kalshi (our coverage).

What it means for Polymarket US users

As of October 4, 2026, we have not seen a court order requiring Polymarket US to restrict trading in New York. Filing a lawsuit does not by itself change what you can trade. If a court grants New York interim relief, the likely effect would be geofencing of some contract types in the state, as has happened to Kalshi in Michigan, Nevada and Washington.

Polymarket US is also named in suits by Wisconsin, Kentucky, Rhode Island and the City of Baltimore, according to court-tracker and press reports. Its own documentation does not publish a list of restricted states, and we have not confirmed one from an official source.

For a full look at how the exchange works, its fees and its regulatory structure, see our Polymarket US review and our guide to Polymarket US versus the global Polymarket site. State-by-state status is in our legal tracker.