NY AG sues Coinbase, Gemini over prediction markets

New York Attorney General Letitia James filed suit on Tuesday against Coinbase and Gemini, accusing the companies of running prediction-market platforms that illegally allowed users to place wagers on sports and elections. The complaint asks a court to impose civil penalties, order restitution to New York residents and require forfeiture of revenues the state says were obtained unlawfully.

The complaint alleges the platforms permitted customers ages 18 to 21 to participate in markets tied to sports outcomes. New York law requires participants in mobile sports betting to be at least 21. The attorney general’s filing contends those features converted the prediction products into unlawful gambling operations and exposed younger users to platforms lacking required consumer protections.

Coinbase rolled out its prediction offering nationwide earlier this year through the Kalshi platform. Gemini’s marketplace, branded Gemini Titan, received clearance from the Commodity Futures Trading Commission late last year. Both Kalshi and Gemini Titan operate under CFTC regulation; the federal agency’s leadership has maintained that event-based contracts traded on such venues fall within its jurisdiction.

The state suit argues that New York gaming and gambling laws apply to sports-related bets on these platforms. In a statement accompanying the filing, Attorney General Letitia James wrote, “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.”

The litigation comes amid a broader legal dispute over whether prediction markets are exclusively regulated by the Commodity Futures Trading Commission or also subject to state gaming laws. Earlier this month the CFTC sued Illinois, Arizona and Connecticut over state actions to block markets the agency calls federally regulated designated contract markets.

Neither Coinbase nor Gemini immediately responded to requests for comment on the lawsuit.