Prediction Markets
in New York
New York has the most aggressive state financial regulator in the US: the NYDFS. Polymarket's QCEX platform explicitly blocks New York residents. Governor Hochul issued an executive order in May 2026 directing state agencies to pursue action against prediction market operators. Kalshi continues to operate under federal CFTC preemption.
The CFTC has sued New York over its event-contract enforcement.
The CFTC filed against New York days after the state alleged that Coinbase and Gemini were violating its gambling laws by listing event contracts. New York is the fifth state the agency has sued in 2026 (alongside Arizona, Illinois, Connecticut, and Minnesota) to defend federal preemption over CFTC-licensed exchanges. The CFTC won its identical preemption argument against Arizona on May 5 before Judge Liburdi, and is asking the Southern District of New York to apply the same three-prong framework here. Governor Hochul's separate executive order on insider trading by state employees is not directly challenged.
Read full coverage → Litigation scoreboard →Which platforms are available in New York?
| Platform | Status in NY | Notes |
|---|---|---|
| Kalshi | Available | CFTC-regulated DCM: operates under federal preemption. Kalshi has not blocked NY residents. |
| Polymarket | Restricted | Polymarket QCEX explicitly blocks New York residents as of May 2026. No access path currently. |
| Manifold | Available | Play-money and sweepstakes cash available in New York. |
| PredictIt | Available | CFTC no-action. Politics-only, $850 per contract cap. Available in NY. |
| Robinhood | Available | Economic contracts via ForecastEx available. Sports contracts via Kalshi available in NY (not NJ-specific rule). |
The NYDFS: Why New York is the hardest state
Governor Hochul's May 2026 executive order
In May 2026, Governor Kathy Hochul issued an executive order directing the NYDFS, the Division of Gaming Enforcement, and the Attorney General's office to pursue enforcement against prediction market operators. The order cited consumer protection concerns and characterized event contracts as gambling products requiring state-level licensing. This is the most significant state-level action against prediction markets in the US alongside Wisconsin's civil suit.
Polymarket's explicit block of New York residents
When Polymarket launched its QCEX licensed US platform in December 2025, it explicitly blocked New York residents: an unusual step that signals Polymarket's legal team concluded the NYDFS risk in New York was not worth the user base. No other state has been specifically blocked by QCEX as of May 2026.
Kalshi and federal preemption
Despite the Hochul executive order, Kalshi continues to operate in New York under the federal preemption doctrine established by the October 2024 court injunction. As a CFTC-designated contract market, Kalshi's legal position is that state law cannot override federal CFTC oversight of event contracts. The executive order may test this doctrine in New York courts in 2026–2027.
- Kalshi: Operating in New York. Federal preemption applies. Use with awareness that state-level legal challenges may develop.
- Polymarket QCEX: Explicitly blocked for NY residents as of May 2026. No access path at this time.
- Non-CFTC platforms: Higher risk than in other states given the Hochul executive order. Consult a New York attorney before using.
- Monitor regulatory developments: the situation is actively evolving in 2026.
Key regulatory events affecting New York
New York prediction market tax rates
New York taxes event contract profits as ordinary income at state rates up to 10.9%. New York City residents pay an additional NYC income tax surcharge (up to 3.876%), bringing combined state + city rates above 14% before federal taxes. This is among the highest state/city combined tax burdens in the US for prediction market profits.
Federal 1099-MISC reporting applies. Net losses deductible up to $3,000/year federally. New York conforms to federal income tax treatment for this category of income.