New York is suing Gemini and Coinbase, two newer players in the prediction markets’ industry. The lawsuit argues that the companies’ unregulated and unlicensed platforms are illegal gambling operations.
The lawsuit was filed by Attorney General Letitia James in state court in Manhattan. It seeks to bar the companies’ platforms from operating in the state unless and until they obtain licenses from the state Gaming Commission.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” James said in a statement. “Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails.”
Coinbase and Gemini began as cryptocurrency trading platforms, to branch out into the prediction market space, currently dominated by Polymarket and Kalshi.
READ: US states sue Trump administration over stoppage of SNAP (October 29, 2025)
Gemini, which was founded by the brothers Cameron and Tyler Winklevoss launched Gemini Predictions in December, while Coinbase started its prediction markets service in January.
“Crypto was just the beginning,” Gemini’s website said Tuesday, next to a prediction box offering bets on such things as the winner of that day’s Chelsea-Brighton Premier League soccer match, when Kevin Warsh will be confirmed as the chairman of the Federal Reserve, and what the price of oil will be Friday.
New York’s lawsuit says that Coinbase and Gemini are seeking “to avoid the legal and financial consequences” of the state’s close regulation of gambling “by offering what is quintessentially wagering under the guise of offering ‘event contracts’ on a ‘prediction market.’”
The lawsuit also says that the companies’ prediction market services are, by operating without licenses, avoiding the taxes paid by licensed casinos and mobile sportsbooks. Licensed casinos and sportsbooks are subject to a 51% tax. Coinbase and Gemini allow users as young as 18, while state law prohibits wagering by anyone under 21.
READ: Coinbase launches new platform for early access to digital tokens (November 11, 2025)
This comes amid ongoing legal battles between predictions’ markets and states seeking to regulate them. Last October, Kalshi sued the state Gaming Commission in October after the commission sought to bar the company’s prediction market business from operating in the state.
In the ongoing case, Kalshi argued that, as a federally designated derivatives exchange, it is subject to the exclusive jurisdiction of the federal regulator, the Commodity Futures Trading Commission.
Coinbase made the same argument when it sued Connecticut, Michigan and Illinois to block those states from attempting to regulate its prediction business. The Commodity Futures Trading Commission sued Arizona, Connecticut, and Illinois earlier this month to block them from policing prediction markets.
A federal judge blocked Arizona’s regulatory attempts–which have included criminal charges against Kalshi–after finding out that the federal commission had demonstrated a reasonable chance of success in showing that the act preempts Arizona law.