New York Sues Coinbase and Gemini, Seeks $3.4B Over 'Illegal' Prediction Markets
AG Letitia James filed parallel suits April 21 in Manhattan state court, seeking at least $2.2B from Coinbase and $1.2B from Gemini. Claim: prediction markets are unregulated gambling.
New York Attorney General Letitia James filed parallel lawsuits on April 21 against Coinbase and Gemini in Manhattan state court, seeking at least $2.2 billion from Coinbase and $1.2 billion from Gemini for operating what she calls illegal gambling products under the "prediction market" label.
What's new
The complaint: sports, entertainment, and political prediction contracts that both platforms offer to New York residents violate state gambling law. Specific allegations include accepting users as young as 18 despite the state's 21-year-old legal gambling age. James: "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and constitution."
Why it matters
This is the first state-level enforcement action directly targeting the CFTC-registered prediction-market boom that's grown sharply since Polymarket's US return and Kalshi's expansion into crypto-adjacent contracts. Coinbase Chief Legal Officer Paul Grewal responded that the company "will continue to fight for the federal oversight of [prediction] markets that Congress intended" — framing the dispute as federal-vs-state jurisdictional. Gemini has not publicly responded.
New York Attorney GeneralThe takeaway
Federal preemption over prediction-market jurisdiction is the central legal question. If New York prevails, every state with stricter gambling laws could follow — and every CFTC-registered prediction venue would face a 50-state patchwork. Watch whether Kalshi and Polymarket itself get named next.
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