New York sued Coinbase and Gemini on Tuesday, becoming the latest state to claim prediction market contracts involving sports, entertainment and elections violate state gambling laws.
Coinbase and Gemini’s prediction market products are actually unlicensed gambling products, according to the lawsuit, which points to how the companies promote their prediction markets and their role as bookmakers on their platforms. The NYAG office also described the actual behavior of prediction market platforms, describing users as “betters” and stating that “each contract is a bet.” The lawsuit also alleges that the platforms allow people between the ages of 18 and 21 to place bets, while New York prohibits anyone under 21 from gambling on mobile apps.
The lawsuit against Coinbase states: “As noted above, the service defendants offer through their platform is gambling in nature: it allows a bettor to bet or take risks based on the outcome of a contest of chance or future contingencies that are beyond the bettor’s control or influence, subject to an agreement or understanding that if a certain outcome occurs, he will receive something of value.”
New York is the latest state to sue prediction market providers over sports and entertainment products. Similar lawsuits have been filed in Nevada, Washington and many other states, arguing that at least sports-related bets are indeed bets and not federally regulated swaps. The issue is now before multiple appeals courts and will likely go before the U.S. Supreme Court.
Coinbase Chief Legal Officer Paul Grewal posted on X (formerly Twitter) that “prediction markets are federally regulated national exchanges” and that Coinbase will fight for federal regulation.
A Gemini spokesman said the company had no comment.
Mike Selig, chairman of the Commodity Futures Trading Commission, argued that prediction markets — including sports-related contracts — fall within the agency’s “exclusive jurisdiction.” The CFTC has filed lawsuits against Arizona, Connecticut and Illinois to prevent them from bringing charges against prediction market providers, and has filed to join a separate case in Nevada to defend prediction market providers.
Kalsi, one of the largest prediction market providers, was not named as a defendant on Tuesday. The company preemptively sued the New York State Gaming Commission last fall, asking a federal court to rule that state gambling laws did not apply to its platform. The case remains pending in the Southern District of New York Court.
New York State Attorney General Letitia James said in a statement that Gemini and Coinbase’s products are “illegal gambling operations.”
“Gambling by any other name is still gambling, and it is not exempt from regulation under our state’s laws and constitution,” she said.
Update (April 21, 2026 22:55 UTC): Gemini added that he declined to comment.
