New York Sues Coinbase and Gemini Over Prediction Markets, Calling Them Illegal Gambling

• New York Attorney General Letitia James has sued Coinbase and Gemini, alleging their prediction market platforms are illegal gambling operations under state law.
• The state is seeking fines, restitution, forfeiture of profits and tighter restrictions on access for younger users.

New York has opened a new front in the legal fight over prediction markets, suing Coinbase Financial Markets and Gemini Titan on the grounds that their event-based trading platforms amount to unlicensed gambling. Attorney General Letitia James said Tuesday that both companies violated New York law by allowing users to bet on outcomes such as sports, elections and entertainment events without obtaining licenses from the New York State Gaming Commission. In the state’s view, these are not novel financial products dressed in modern language. They are wagers on uncertain events, and therefore gambling. New York argues event contracts are still wagers James made the state’s position quite plain. “Gambling by another name is still gambling,” she said in the attorney general’s announcement, adding that the platforms expose young people to addictive products without the safeguards required under New York law. The lawsuits were filed in state court in Manhattan and seek court orders requiring the companies to forfeit illegal profits, pay civil fines, and provide restitution to affected users. Age limits and tax treatment are also under scrutiny New York’s complaint goes beyond the licensing issue. The attorney general said Coinbase and Gemini allowed access to users aged 18 to 20, even though New York requires participants to be at least 21 for mobile sports betting. The state also argues the companies avoided the taxes and regulatory obligations faced by licensed operators. The cases land in the middle of a wider jurisdictional struggle over who controls prediction markets in the United States. Coinbase has argued elsewhere that these products fall under federal oversight, particularly through the CFTC, not state gambling law. That clash is still playing out, and New York has now made clear it does not intend to wait for Washington to settle it first.