NY Sues Coinbase, Gemini for Alleged Illegal Gambling Platforms
New York has filed lawsuits accusing Coinbase and Gemini of running illegal gambling operations.
Why it matters: This move raises the stakes for crypto exchanges operating prediction markets, triggering industry-wide compliance concerns. New York's enforcement could become a template for future state and national regulation.
- Attorney General Letitia James filed lawsuits against Coinbase and Gemini on April 21, 2026.
- Both companies allegedly operated unlicensed prediction markets allowing bets on events like sports and elections.
- The state seeks forfeiture of profits, fines, and restitution for consumers.
- Platforms allegedly exposed users as young as 18 to gambling despite New York's 21+ age requirement.
New York Attorney General Letitia James announced legal action against Coinbase Financial Markets, Inc. and Gemini Titan LLC, alleging that their new prediction market products constitute illegal gambling under state law.
- The lawsuits claim neither company obtained the required licenses from the New York State Gaming Commission for their platforms, which let users wager on outcomes for sports, elections, and award shows.
- James is seeking court orders to force Coinbase and Gemini to pay fines, forfeit allegedly illegal profits, and provide restitution to any affected consumers.
- "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution," James said. She added, "Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails."
- Both companies are accused of allowing participation from users as young as 18, even though state law sets the minimum gambling age at 21.
- The lawsuits also state that, by operating without licenses, the companies avoid the 51% tax on licensed gambling revenues in New York.
Coinbase launched its service in January 2026, while Gemini entered the market in December 2025. The crackdown follows a 2024 settlement in which Gemini paid $50 million to resolve allegations of defrauding over 230,000 investors in another product (link).
With this legal push, New York signals its intent to hold crypto firms to established gambling laws, sharpening regulatory expectations for digital asset platforms offering event-driven financial products.
By the numbers:
- 51% — Tax rate on gross revenue for licensed gambling in NY
- 21 — Legal minimum gambling age in New York
- $50 million — Gemini paid in 2024 settlement over defrauded investors
Yes, but: Details on the companies' alleged profits from prediction markets and their responses remain undisclosed.