New York has initiated legal proceedings against cryptocurrency exchanges Coinbase and Gemini, claiming their prediction market contracts related to sports and entertainment violate state gambling laws. The lawsuits were filed on April 21, 2026, marking the latest step in a growing trend among states scrutinizing prediction markets.
The New York Attorney General’s office argues that the offerings from both companies function as unlicensed gambling products. The lawsuits highlight the way these platforms are marketed, suggesting that they operate similarly to bookmakers. The state contends that users are effectively treated as “bettors,” with each contract representing a wager.
Furthermore, the complaints point out that the platforms permit individuals aged 18 to 21 to engage in betting, despite New York’s restrictions that prohibit anyone under 21 from gambling via mobile applications. The suit against Coinbase states, “What Respondent offers through its platform is quintessentially gambling: It allows a bettor to stake or risk money upon the outcome of a contest of chance or a future contingent event not under the bettor’s control or influence.”
New York’s actions follow similar lawsuits from other states, including Nevada and Washington, which have also challenged prediction market providers over their sports-related offerings. This legal matter is currently under review in multiple appeals courts and may eventually reach the U.S. Supreme Court.
In response to the lawsuit, Coinbase’s Chief Legal Officer Paul Grewal asserted on social media platform X (formerly Twitter) that prediction markets should be classified as federally regulated national exchanges, indicating that Coinbase plans to contest the state’s claims.
Meanwhile, the Chairman of the Commodity Futures Trading Commission (CFTC), Mike Selig, has maintained that prediction markets, including those focused on sports, fall under the jurisdiction of his agency. The CFTC has taken legal action against states like Arizona, Connecticut, and Illinois to prevent them from prosecuting prediction market providers, and it has sought to intervene in a related case in Nevada.
Notably, Kalshi, a significant player in the prediction market space, was not included as a defendant in the recent lawsuits. The company previously filed a lawsuit against the New York State Gaming Commission, seeking a federal court’s determination that state gambling laws do not apply to its operations. This case is still pending in the Southern District of New York.
New York State Attorney General Letitia James emphasized the illegality of the products offered by Gemini and Coinbase, stating, “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution.”
New York has filed lawsuits against Coinbase and Gemini, alleging their prediction market contracts violate state gambling laws. This legal action reflects a broader trend among states questioning the legality of prediction markets, with implications that may reach the U.S. Supreme Court.