New York Attorney General Letitia James has filed suit against Coinbase and Gemini, accusing both exchanges of illegally offering prediction market betting on events including sports and elections.
In her statement, James said the two companies violated New York laws through their prediction market platforms, and is seeking fines, restitution, and forfeiture of profits the state considers illegally obtained.
James stated:
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution. Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails.”
Neither Coinbase nor Gemini immediately responded to requests for comment.
Age restrictions at the center
James took particular issue with both platforms allowing users between the ages of 18 and 21 to participate, while New York State law requires a person to be at least 21 years old to engage in mobile sports betting.
Earlier this year, Coinbase rolled out its prediction markets offering across all 50 U.S. states through the CFTC-regulated platform Kalshi.
Gemini received its own CFTC clearance late last year to enter the prediction market space with a product called Gemini Titan.
Regulatory limbo
Prediction markets have been caught in a prolonged jurisdictional dispute, with CFTC Chairman Michael Selig asserting that such platforms fall under his agency’s exclusive federal jurisdiction.
States, however, argue the platforms are violating local gaming and gambling laws, particularly around sports-related bets.
The conflict has increasingly spilled into the courts.
Earlier this month, the CFTC sued Illinois, Arizona, and Connecticut over their efforts to shut down what the agency describes as federally regulated designated contract markets.
What’s at stake
The lawsuit marks a significant escalation in the state-versus-federal standoff over prediction markets, with two of the largest crypto exchanges now directly in the crosshairs of a major state regulator.
The outcome could set a precedent for how prediction market platforms operate across the U.S., particularly in states with strict gambling laws.
