New York’s attorney general sued Coinbase Financial Markets COIN.O and Gemini Titan GEMI.O on Tuesday, claiming their prediction markets violate state laws against illegal gambling.
In petitions filed in state court in Manhattan, Attorney General Letitia James said Coinbase and Gemini failed to obtain New York State Gaming Commission licenses to operate their markets, where people trade based on the predicted outcomes of events such as sports and elections.
James said Coinbase’s and Gemini’s so-called event contracts are “quintessentially gambling” because event outcomes are outside bettors’ control or amount to games of chance.
She also objected to the Manhattan-based companies letting 18- to 20-year-olds use their platforms, despite a state law setting a minimum age of 21 for mobile sports betting.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” James said in a statement.
State regulators are currently battling the federal Commodity Futures Trading Commission for oversight of prediction markets, which at least one company prefers.
“Coinbase will continue to fight for the federal oversight of these markets that Congress intended,” Coinbase Chief Legal Officer Paul Grewal said in response to James’ lawsuit.
Gemini did not immediately respond to requests for comment. Its parent Gemini Space Station is led by billionaire twins Tyler Winklevoss and Cameron Winklevoss, who are respectively chief executive and president.
James wants to recoup illegal profits, civil fines equal to triple those profits, and restitution to customers. She also wants to ban wagers by people under 21, and restrict Coinbase and Gemini from marketing on college campuses.
REGULATORS BATTLE OVER AUTHORITY
Prediction markets have surged in popularity since the 2024 U.S. presidential election, when their real-time probabilities proved more accurate than polling in predicting Republican Donald Trump’s victory over Democrat Kamala Harris.
Coinbase and Gemini launched their prediction markets in mid-December and operate them in all 50 U.S. states, court papers show.
On April 2, the CFTC sued Arizona, Connecticut and Illinois to stop them from regulating prediction markets.
The agency cited its “exclusive regulatory authority” over commodity derivative markets, including prediction markets, and a desire to defend market participants against “overzealous state regulators.”
Four days later, the federal appeals court in Philadelphia sided with Kalshi in finding that the CFTC had exclusive oversight of its sports-related event contracts, and New Jersey gaming regulators could not ban them.
In October 2025, Kalshi sued the New York State Gaming Commission in Manhattan federal court to preemptively block any effort to ban its event contracts in the state. That case remains pending. Nevada won temporary court injunctions banning Kalshi and Coinbase from offering event contracts there.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese, Daniel Wallis and David Gaffen)
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