TLDR
- Attorney General Letitia James has initiated legal proceedings against Coinbase and Gemini over prediction market offerings
- New York alleges both cryptocurrency platforms operated gambling services without proper Gaming Commission authorization
- Legal actions demand return of unlawful gains, user compensation, and age restrictions for platform access
- Multiple states such as Nevada and Washington have pursued comparable legal challenges against similar providers
- Federal regulators at the CFTC claim exclusive authority over prediction markets, contradicting state-level enforcement efforts
On April 21, 2026, New York’s Attorney General Letitia James initiated lawsuits targeting Coinbase Financial Markets and Gemini Titan, alleging the cryptocurrency platforms operated unauthorized gambling services within state boundaries.
According to the legal filings, both organizations launched prediction market offerings to New York residents without securing necessary approvals from the state’s Gaming Commission.
In an official statement, James declared: “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution.”
The legal documents characterize platform participants as “bettors” and define “each contract is a bet.” The complaints further allege that both services permitted individuals aged 18 to 21 to participate, directly violating New York regulations that prohibit anyone under 21 from using mobile gambling applications.
New York’s legal action demands the recovery of profits deemed unlawful, compensation for affected users, and enforcement of age-based restrictions preventing anyone under 21 from accessing these services.
Coinbase Chief Legal Officer Paul Grewal responded to the allegations through social media platform X, asserting that “prediction markets are federally regulated national exchanges.” He indicated the company’s commitment to defending federal regulatory oversight of the industry.
Gemini has not issued a public response.
A Growing Legal Battle Between States and Federal Regulators
New York joins a growing list of states challenging prediction market operations. Nevada, Washington, and additional jurisdictions have pursued similar legal strategies, contending that sports-focused prediction agreements constitute wagers rather than federally sanctioned financial instruments.
These disputes are currently under review by various appellate courts and may ultimately require resolution by the U.S. Supreme Court.
Meanwhile, Commodity Futures Trading Commission Chairman Mike Selig has maintained that prediction markets, including those involving sporting events, belong under the CFTC’s “exclusive jurisdiction.”
The federal agency has initiated legal proceedings against Arizona, Connecticut, and Illinois to prevent state-level enforcement actions against prediction market operators. The CFTC has also intervened in Nevada litigation to support these platforms.
Where Other Platforms Stand
Kalshi, recognized as a major prediction market operator, was not included in this week’s legal actions. The platform had previously filed its own lawsuit against New York’s Gaming Commission last autumn, requesting federal court confirmation that state gambling regulations don’t govern its operations. Those proceedings remain active in the Southern District of New York.
Polymarket has adopted a comparable legal strategy, challenging Massachusetts authorities by arguing the state cannot regulate prediction markets already authorized by the CFTC.
The legal complaints against Coinbase and Gemini were officially filed on April 21, 2026, with both matters now proceeding through the court system.
