politics
New York Sues Polymarket, Seeks Court Order to Shut It Down
New York filed suit against Polymarket on September 24, 2026, in New York County court, asking a judge to order the prediction-market platform to stop operating in the state and to pay fines, forfeit gains and provide restitution to users, according to a state press release cited by Ars Technica. The filing calls Polymarket an "illegal gambling operation" and comes weeks after the Commodity Futures Trading Commission (CFTC) declared a "market emergency" in New York in August 2026, an attempt to block the state from applying its gambling statutes to Polymarket's rival, Kalshi.
What does New York's lawsuit allege?
The state's core claim is that Polymarket lets users ages 18 to 20 place bets, even though New York law sets the minimum age for mobile sports betting at 21, according to the press release. Attorney General Letitia James said the platform is "targeting the most vulnerable and depriving New York families of critical services and support." The suit also alleges Polymarket avoids the tax obligations that licensed casinos and mobile sportsbooks carry — revenue the state says funds public schools, youth sports programs and problem-gambling treatment.
How does this conflict with the CFTC's position?
The CFTC asserts exclusive federal jurisdiction over Polymarket and Kalshi, which structure sports wagers as "event contracts" or swaps rather than bets. New York and "some courts," per Ars Technica, treat those contracts as gambling under a different name. The August 2026 emergency declaration was aimed at Kalshi litigation, but it signals the same federal-state clash now applies to Polymarket's New York case. Governor Kathy Hochul framed the stakes in market terms: Polymarket, she said, "has done more than just knowingly violate state law, they have put New Yorkers at risk."
Why has Polymarket's U.S. access been limited since 2022?
Polymarket's main exchange has been technically unavailable to U.S. users since 2022, when the CFTC ruled it an unregistered exchange, according to Ars Technica. The company's website currently runs in view-only mode domestically, though the outlet notes users can bypass that restriction with a VPN. Polymarket has a separate, more limited mobile product it has promoted to U.S. users; a Wall Street Journal report cited by Ars Technica found the company paid social media users to post videos simulating bets on copies of its site. Polymarket is separately seeking CFTC approval to relaunch its main exchange in the U.S.
Has New York taken this kind of action before?
Yes. New York previously sued Kalshi, Polymarket's chief competitor, over similar unlicensed-gambling claims, according to the report. The new Polymarket suit extends that legal strategy to the platform that has drawn the larger prediction-market user base nationally.
What happens next in court?
The case now sits in New York County court, where the state is seeking injunctive relief plus financial penalties. The outcome will hinge on whether a state judge accepts New York's gambling-law framing or defers to the CFTC's claim of exclusive federal authority — a jurisdictional question neither side has yet resolved in court.
Questions
What is New York asking the court to do to Polymarket?
New York is seeking a court order stopping Polymarket from operating as an unlicensed gambling business, plus fines, forfeiture of gains and restitution to users, according to the state's press release.
Why does New York say Polymarket's minimum age matters?
New York law requires users to be at least 21 for mobile sports betting, but the state says Polymarket is available to users ages 18 to 20.
How does the CFTC's position conflict with New York's lawsuit?
The CFTC claims exclusive federal jurisdiction over prediction markets and declared a market emergency in August 2026 to block New York's gambling laws from applying to Kalshi, a stance that now clashes with the state's Polymarket suit.