Why is New York suing Coinbase and Gemini?

The New York Attorney General's Office sued Coinbase and Gemini over their prediction market products. The state argues these offerings function as unlicensed gambling tied to sports, entertainment, and other events.

What are prediction markets in this case?

Prediction markets allow users to trade on the outcome of future events. New York claims these contracts are effectively bets, while the companies argue they are financial instruments.

What is New York’s main legal argument?

New York says the platforms allow users to “stake money” on uncertain outcomes, which meets the definition of gambling under state law. The state also argues the platforms act as bookmakers and allow underage participation in some cases.

What did Attorney General Letitia James say about the case?

Letitia James stated that “gambling by another name is still gambling.” This reflects the state’s position that prediction markets cannot bypass gambling regulations.

How are Coinbase and Gemini responding?

Coinbase argues prediction markets are federally regulated exchanges, not gambling platforms. Gemini has not publicly commented in detail, but both firms are expected to challenge the lawsuits.

Which other states are involved in similar cases?

States including Nevada and Washington have also taken action against prediction market providers. This shows a broader push at the state level to classify these products as gambling.

What is the federal government’s position on prediction markets?

The Commodity Futures Trading Commission argues that prediction markets fall under its jurisdiction as financial derivatives. This creates a conflict between state gambling laws and federal financial regulation.

Why is this legal battle important for investors?

The outcome will determine whether prediction markets can operate widely in the US. It could affect growth strategies for companies like Coinbase and Robinhood that are expanding into these products.

New York sues Coinbase Gemini over prediction markets

Written by Jon CuthbertPublished Apr. 22 2026Last Updated Apr. 22 2026

New York Attorney General's Office has sued Coinbase and Gemini, alleging their prediction market products violate state gambling laws.

The lawsuits claim the platforms offer unlicensed betting products tied to sports, entertainment, and other events, describing users as bettors and contracts as wagers.

“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,”

Said Letitia James.

New York joins several other states, including Nevada and Washington, in challenging prediction markets, arguing such contracts should be regulated as gambling rather than financial instruments.

The companies dispute this view, with Coinbase maintaining that prediction markets fall under federal oversight as regulated exchanges.

The regulatory conflict has intensified as the Commodity Futures Trading Commission asserts jurisdiction over prediction markets, setting up a broader legal battle between state and federal authorities.

The issue is now moving through US courts and could ultimately be decided by the Supreme Court, shaping the future of prediction markets in the country.