News
New York Sues Coinbase and Gemini for Gambling
New York Attorney General Letitia James sued Coinbase Financial Markets and Gemini Titan LLC on 21 April, alleging the companies are operating illegal, unlicensed gambling platforms through their prediction market products. The complaints, filed in a Manhattan state court, seek full forfeiture of illegal profits plus fines equal to three times the revenue generated from New York residents. James's office contends that neither company obtained a New York State Gaming Commission license before accepting wagers on sporting events, entertainment outcomes, and election results.
What This Means for Crypto Casino Players
Coinbase and Gemini rank among the most commonly used exchanges for purchasing crypto in North America, meaning a significant number of Canadian casino players hold accounts on one or both platforms. While the New York lawsuit applies specifically to US residents, any court orders restricting platform features in the state could serve as a template for regulatory action in Canada, where provincial and federal authorities are both increasingly active on gambling oversight. Canadian players who prefer established, licensed operators can review available options on our guide to the best crypto sports betting sites for Canadian players.
The AG's complaint outlines several specific breaches beyond the absent license. Coinbase and Gemini accepted wagers from users aged 18 to 20, below the 21-year minimum that New York law mandates for mobile sports betting. Both platforms also took bets on games involving New York college teams, which state legislation expressly forbids. The companies further avoided paying approximately 51% gross revenue tax by operating without a license—funds the state directs to schools, youth programs, and addiction treatment resources.
The Federal vs. State Dispute
The lawsuits enter an ongoing clash between state and federal authorities over how to classify crypto prediction market contracts. Coinbase Chief Legal Officer Paul Grewal immediately called the platforms “federally regulated national exchanges registered with the CFTC,” echoing arguments Kalshi has made in similar enforcement fights across multiple US states this year. The Commodity Futures Trading Commission has supported that characterization, creating a scenario in which a federal regulator is effectively defending companies being sued by state attorneys general.
New York's willingness to take on Coinbase and Gemini—both significantly larger than Kalshi or Polymarket—signals a broader escalation. A federal appeals court ruled in Kalshi's favor against New Jersey just last week, but an opposing ruling is expected from a separate circuit covering Arizona, which filed criminal charges against the platform. Canadian regulators and the Alcohol and Gaming Commission of Ontario are watching these US proceedings closely, as the legal arguments produced could shape how prediction market products are classified north of the border. With the NHL playoffs underway, Canadian crypto sports bettors are particularly active this month.
What to Watch
New York courts are likely to schedule a preliminary injunction hearing within weeks, determining whether Coinbase and Gemini must suspend prediction market operations in the state during the litigation. The CFTC's formal response to the state lawsuits, expected before the end of April, will show whether federal authorities plan to intervene on behalf of the exchanges. Canadian players who use either platform as an on-ramp for crypto gambling deposits should monitor any account restriction notices, as enforcement actions in the US can occasionally prompt exchanges to broaden restrictions beyond the targeted jurisdiction.