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 running illegal, unlicensed gambling operations through their prediction market platforms. The lawsuits, filed in a Manhattan state court, seek forfeiture of all illegal profits and fines equal to three times the revenue each company earned from New York residents. James's office says neither Coinbase nor Gemini obtained a New York State Gaming Commission licence before accepting wagers on sporting events, entertainment outcomes, and election results.
What This Means for Crypto Casino Players
Coinbase and Gemini are two of the most widely used exchanges for buying crypto in the United States, meaning many casino players fund their accounts through one or both platforms. If New York courts issue a permanent injunction, it could restrict state residents from accessing prediction market products on these exchanges—and depending on how broadly any ruling is written, related crypto gambling services could also be affected. Players seeking established operators with clear licensing can review options on our guide to the best crypto sports betting sites for US players.
The AG's complaint identifies several specific violations beyond the absent licence. Coinbase and Gemini allowed users aged 18 to 20 to participate in their prediction markets, despite New York law requiring bettors to be at least 21 to access mobile sports wagering. Both platforms also accepted bets on games involving New York college teams, a category that state law expressly prohibits. By operating without a licence, the companies further avoided paying the approximately 51% gross revenue tax that licensed New York mobile sportsbooks must remit to the state—funds the AG noted help finance schools, youth programmes, and addiction treatment services.
The Federal vs. State Divide
The lawsuits land in the middle of a widening conflict between state and federal authorities over whether prediction market contracts are financial derivatives or gambling products. Coinbase Chief Legal Officer Paul Grewal pushed back immediately, describing the company's platform as a “federally regulated national exchange registered with the CFTC.” That argument mirrors the position Kalshi has been advancing against multiple states throughout 2026. The Commodity Futures Trading Commission has backed the financial-products interpretation, creating a situation where a federal regulator is aligned with companies being prosecuted by state attorneys general.
New York is among the most aggressive states on gambling enforcement, and a successful case here could encourage similar actions in other large markets. A federal appeals court ruled in Kalshi's favour against New Jersey last week, but a separate circuit is expected to rule the opposite way in Arizona—a split that many analysts believe will force the US Supreme Court to settle the classification question within the next 12 to 18 months. Attorney General James framed the core argument concisely: “Gambling by another name is still gambling.”
What to Watch
The New York cases are likely to move toward a preliminary injunction hearing in the coming weeks, at which point a judge will decide whether to suspend the prediction market operations while litigation proceeds. Players in New York should verify platform availability before depositing, as state enforcement actions can restrict access with limited notice. The CFTC's formal response to the state lawsuits—expected before the end of April—will indicate whether federal intervention is forthcoming. A congressional bipartisan bill introduced in March that would classify all crypto prediction bets as gambling adds a parallel legislative track to monitor alongside the courts.