New York Attorney General Letitia James filed lawsuits against cryptocurrency exchanges Coinbase and Gemini on Tuesday, April 21, 2026, alleging that the companies operated illegal gambling platforms through their prediction markets. The complaints, filed in Manhattan state court, claim that both Coinbase Financial Markets and Gemini Titan failed to obtain the necessary licenses from the New York State Gaming Commission to offer wagering on the outcomes of real-world events.
The Attorney General’s investigation found that the exchanges’ prediction markets—which allow users to trade contracts based on predicted outcomes for sports, entertainment, and elections—violate New York state gambling laws. According to the filings, these "event contracts" constitute gambling because the outcomes are beyond the participants' control and are essentially games of chance. James stated that "gambling by another name is still gambling," emphasizing that these platforms are not exempt from state regulation or the New York Constitution.
In addition to the licensing allegations, the lawsuits claim that Coinbase and Gemini permitted users aged 18 to 20 to access their wagering platforms. New York law requires a minimum age of 21 for mobile sports betting and similar gambling activities. The state also accused the companies of improperly marketing their prediction market products on college campuses across New York, violating state-level protections intended to curb underage gambling.
The Attorney General is seeking significant financial penalties, including the recovery of all illegal profits and civil fines equal to triple those profits. The state is also requesting $100,000 in penalties for every unauthorized wagering offer made to New York residents and full restitution for affected customers. Furthermore, the suits seek to prohibit the companies from allowing users under 21 to wager and to curb their marketing practices on educational grounds.
The lawsuits are notable for excluding other major prediction market operators like Kalshi and Polymarket. These platforms have dominated the "event contract" space, which proponents argue is more akin to financial trading than gambling. The decision to target Coinbase and Gemini follows their mid-December launch of prediction market services across all 50 U.S. states, marking an expansion of their core cryptocurrency exchange business into speculative event trading.
Legal experts describe the cases as a "trial balloon" in a complex landscape of state and federal litigation. The filings come just four days after a federal appeals court in Philadelphia ruled in favor of Kalshi, finding that the Commodity Futures Trading Commission (CFTC) has exclusive oversight of certain event contracts. However, Attorney General James’s office maintains that state gambling laws provide a separate basis for enforcement. The outcome of these cases could establish a major precedent for how state regulators manage emerging financial instruments that overlap with traditional wagering frameworks.