Polymarket Sues New York AG Over Gambling Law Preemption

Polymarket US sued New York Attorney General Letitia James and all eight officials of the New York State Gaming Commission in federal court on September 24, 2026. The 31-page complaint asks a judge to declare New York's civil and criminal gambling laws preempted as applied to Polymarket, and to enjoin every one of those officials from enforcing them. It was filed about five and a half hours after Polymarket removed the state's own case against it to the same courthouse.

The case is QCX LLC d/b/a Polymarket US v. James, No. 1:26-cv-08345, in the Southern District of New York. The clerk classified it as nature of suit 950, "Constitutional - State Statute", brought on federal-question jurisdiction with a jury demanded by the plaintiff.

Who exactly did Polymarket sue?

Nine people, every one of them in their official capacity. Attorney General Letitia James is the first named defendant. The other eight run the New York State Gaming Commission: Chair Brian O'Dwyer, Vice Chair Peter J. Moschetti, Jr., Commissioners John A. Crotty, Sylvia B. Hamer, Martin J. Mack, Marissa Shorenstein and Jerry Skurnik, and Executive Director Robert Williams. Paragraph 21 says all eight "have the power and duty to enforce New York gaming laws, including the laws preempted by federal law".

Gibson Dunn & Crutcher filed it, signed by Orin Snyder. The Rule 7.1 statement filed alongside it names two corporate parents, QCL Quad Code USA Corporation and Blockratize Inc., plus five affiliates: QC Tech LLC, A2 QSS LLC, QC Clearing LLC, Coming Home GBA LLC and PM Derivatives LLC. The clerk's text for the same disclosure in the removal case, docketed five hours earlier that afternoon, names the same seven entities in the same order.

What is Polymarket asking the court to do?

Two things, both sweeping:

1. A declaratory judgment that "New York's civil and criminal gaming, gambling, and wagering laws are preempted under the CEA as applied to Plaintiff".
2. Preliminary and permanent injunctions stopping the defendants from enforcing those laws "or any other state law or regulation to the extent it purports to regulate or prohibit Plaintiff's activities governed exclusively by federal law".

There is exactly one count: Commodity Exchange Act preemption, pleaded three ways over 22 paragraphs as express preemption, field preemption and conflict preemption. The vehicle is the Supremacy Clause and Ex parte Young. No damages are sought.

Why does the complaint never mention the case New York filed that day?

It is drafted as a pre-enforcement suit, and on its face the state's petition does not exist. We searched all 31 pages: the complaint never cites case number 1:26-cv-08338, never uses the phrase "special proceeding", and never names Executive Law § 63(12), the statute carrying all eight of New York's causes of action. What it says instead, at paragraph 74, is that Polymarket "faces the imminent threat of enforcement by New York". Paragraph 76 calls that enforcement "near-certain". Whether that reflects drafting that began before the state filed, or a deliberate choice to plead around it, is not something the document says and not something we will guess at.

The evidence it offers for that threat is the state's record against everyone else. Paragraph 72 recites the April 21, 2026 suits against Coinbase Financial Markets and Gemini Titan, "all apparently without sending cease-and-desist letters", and the July 31, 2026 suit against KalshiEX. Paragraph 2 says the defendants "have pursued crushing civil and criminal penalties against three other CFTC-regulated entities that offer event contracts, each time accompanied by a temporary restraining order". Footnote 1 quotes the Attorney General's own February 2, 2026 consumer alert: prediction markets "may appear as modern, high-tech platforms for speculation or 'forecasting,' but in practice, many operate as unregulated gambling".

One more tell sits on the signature page. It reads "Attorneys for Defendant QCX LLC, d/b/a Polymarket US" in a document where QCX is the plaintiff, which is the sort of thing that happens when two filings are built in one afternoon.

What happened on September 24, and in what order?

The court's own public filing feed stamps both events on September 24. Here is the sequence it records, in Eastern time:

So the defensive move and the offensive one landed within seven hours of each other, out of the same office, on one afternoon and evening. We covered the removal and the state petition behind it yesterday. This second case is separate: its own number, its own $405 filing fee and receipt number, and its own set of nine summonses. No judge appears on either docket as of our read.

What does this mean for sweepstakes players in New York?

It is the clearest illustration yet of why dual-currency casinos folded in New York and prediction markets did not, and the overlap is not loose. Polymarket's own paragraph 72 says New York pleaded Penal Law §§ 225.05, 225.10 and 225.20 against Coinbase, Gemini and Kalshi. Two of those three sections, 225.10 and 225.20, are the ones the Attorney General's office used against VGW, the largest sweepstakes operator in the market, alongside Executive Law § 63(12). Same office, same statutes, opposite outcomes.

The difference is that a CFTC-designated contract market can walk into federal court and argue that Congress took the subject away from the state. A sweeps operator has no federal regulator to point at. One operator did come at this from the sweepstakes side: Novig added a CFTC-designated exchange through a subsidiary and sued James on the same preemption theory in August, and its sweeps coins are now retired. VGW never tested it: it stopped selling in New York in June 2025, six months before the state's sweepstakes ban was even signed, and on September 9 it settled for $8 million on those general gambling provisions rather than litigate. The sweepstakes statute appears in the findings of that settlement only as background. That settlement is also the one live thing on this page for a New York reader: page five of the signed Assurance opens a redemption right for players who never received VGW's 2025 phase-out email, running to August 31, 2027.

Whether that argument works is still genuinely unsettled. Connecticut's federal court rejected it in August, a Washington court rejected it and ordered geofencing, and New Jersey has asked the Supreme Court to resolve the split.

Nothing filed on September 24 changes what a New York player can legally do today, and the only thing here that is worth acting on is a deadline that predates it. Sweeps coins are out: S5935A took effect the day Governor Hochul signed it, December 5, 2025. If you held VGW Sweeps Coins on June 2, 2025 and never got the phase-out email, the claim window from that settlement is the live item, not this docket, and it closes on August 31, 2027. Our guide to where sweepstakes casinos are legal tracks the states that have made the same call as New York, and if you are somewhere brands still operate, the best sweepstakes casinos list is built around exactly those state lines.

Sources & documents

• Docket, QCX LLC d/b/a Polymarket US v. James, No. 1:26-cv-08345 (S.D.N.Y.) - case number, the nine named defendants, nature of suit, and every entry cited above, read September 25, 2026
• Complaint for declaratory judgment and injunctive relief, 31 pages - the source of every paragraph number, quotation and prayer item in this article
• Southern District of New York public filing feed - the timestamps in the table, published by the court in GMT and converted to Eastern here
• CourtListener entry search for Polymarket filings since September 21 - how the second case was found
• Attorney General James and Governor Hochul announce lawsuit against Polymarket - the state's September 24 release

We found this case on the court's own records, not in a press release, and neither side had commented on it publicly when we published. Polymarket's characterisations of New York's conduct are allegations in a complaint that no court has tested. We asked nothing of either party and quote only filed documents. The public mirror lags the court's live system, so the docket may have moved since we read it.

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