New York AG Sues Coinbase & Gemini Over Prediction Markets

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Wed Apr 22, 2026, 8:00 am ET

Read Time: 3 minutes

New York AG Sues Coinbase & Gemini Over Prediction Markets

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New York Attorney General Letitia James filed lawsuits against Coinbase Financial Markets, Inc. and Gemini, Titan LLC.

The state alleges both companies operate unlicensed gambling platforms through prediction markets and event contracts. Officials say these products replicate gambling activity without proper state authorization.

Meanwhile, the case adds pressure to ongoing regulatory debates involving US online sportsbooks and digital prediction platforms. 

Authorities argue users can wager on uncertain real-world outcomes. These include sports games, elections, and entertainment events. New York claims this structure qualifies as gambling under state law.

In addition, regulators emphasize that neither company holds a license from the New York State Gaming Commission.

Why NY AG Letitia James filed lawsuits against Coinbase and Gemini

Attorney General Letitia James in a press release strongly criticized the companies' platforms.

She stated, "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and constitution."

James added, "Gemini and Coinbase's so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails."

She also explained the mechanics of the products. James said prediction markets "allow users to bet money on the outcome of a wide range of future events, from sports games to elections to award shows."

She concluded that they therefore fit the legal definition of gambling in New York.

Furthermore, the state argues that both companies operate outside regulatory boundaries. Officials say the platforms enable users to trade on uncertain outcomes for financial gain. As a result, regulators classify the activity as unlicensed gambling under New York gambling law.

Gambling Regulation Concerns as Grounds for the Lawsuit

New York raises several compliance concerns in its filings.

First, officials argue the companies bypass the state's sports betting tax structure. This affects revenue typically generated through regulated US online sportsbooks. Additionally, regulators say the platforms avoid strict consumer protection requirements.

Authorities also highlight underage access risks. New York law sets the gambling age at 21. However, the complaint alleges users aged 18 to 20 accessed the platforms. This raises concerns about age verification and platform safeguards.

Moreover, the lawsuit challenges certain betting categories. These include wagers on New York college sports teams. They also include politically sensitive markets such as election outcomes. Regulators argue these offerings increase integrity and public trust risks.

New York Seeks Penalties Tied to Trading Activity and Profits

Rather than fixed damages, New York seeks financial remedies based on activity and revenue. The state requests disgorgement of profits generated from New York users. It also seeks triple damages tied to alleged unlawful conduct.

Additionally, regulators aim to recover funds linked to unauthorized transactions. The complaint suggests Coinbase and Gemini may have generated substantial revenue from New York-based trading activity.

However, the exact figures are not presented as fixed totals in the filings. Instead, the state indicates it will calculate penalties based on trading volume and profits. Authorities also request restitution for affected users. They further seek civil penalties for each unauthorized transaction.

Finally, New York asks for an injunction blocking operations unless properly licensed. Legal dispute over prediction markets versus gambling New York argues prediction markets function as disguised gambling systems.

Officials say rebranding does not change the underlying betting mechanics. Therefore, they classify the platforms as illegal gambling operations under state law. 

Coinbase and Gemini's Defense

Coinbase and Gemini are expected to dispute that interpretation. They may argue federal oversight applies through the Commodity Futures Trading Commission. Both companies are also likely to frame event contracts as financial derivatives.

In addition, they will likely reject the gambling classification entirely. This case highlights a broader regulatory conflict in financial innovation. It pits state gambling enforcement against emerging digital prediction market models.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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