New York sues Coinbase and Gemini over illegal prediction markets

New York is drawing a hard line between regulated sports wagering and what it says are prediction markets disguised as finance. Attorney General Letitia James sued Coinbase Financial Markets, Inc. and Gemini Titan LLC in Manhattan state court on April 21, accusing both firms of running illegal gambling operations in New York without the licenses required by the New York State Gaming Commission.

The petition says the companies offered event contracts tied to sports contests, entertainment and elections, then opened those markets to New Yorkers age 18 and older even though state law sets 21 as the minimum age for mobile sports betting. James argues the products function like bets because customers cannot control the outcome, making them games of chance rather than legitimate financial instruments. Her office is seeking to recover alleged illegal profits, impose civil penalties equal to triple those profits and obtain restitution for customers.

The filing also presses a consumer-protection point that reaches beyond Wall Street jargon. New York is asking the court to bar wagers by people under 21 and to stop the companies from marketing on college campuses, a sign that the state sees younger users as a central vulnerability if prediction markets keep expanding. The state is also tying the case to how gambling revenue is supposed to be used, noting that tax dollars from licensed mobile sports wagering help fund public schools, youth sports programs and problem gambling education and treatment.

The lawsuit lands as prediction markets move from niche trading products into a national fight over politics, sports and entertainment. Coinbase and Gemini launched their prediction offerings in December 2025 and say they operate in all 50 states, giving the case a scope far beyond New York. Gemini said on December 10, 2025, that Gemini Titan had received a Commodity Futures Trading Commission designated contract market license after a five-year application process that began on March 10, 2020. Gemini Predictions went live in the United States on December 15, 2025, and Coinbase also expanded into prediction markets that month as part of a broader product push.

The battle is not only about gambling law. It is also about which regulator gets to control a fast-growing market that now touches elections as well as games and entertainment. On April 2, 2026, the Commodity Futures Trading Commission sued Arizona, Connecticut and Illinois, saying Congress gave it exclusive jurisdiction over event contracts and warning against a patchwork of state rules. The commission said event contracts were first officially recognized in 1992 through the Iowa Electronic Markets and later fell under broader federal authority after the 2008 financial crisis. Coinbase said it would keep fighting for the federal oversight it believes Congress intended. Gemini did not immediately comment.