New York Sues Coinbase and Gemini for Gambling

What This Means for Crypto Casino Players

South African players are not directly subject to New York gambling law, and these proceedings will not immediately affect access to international platforms available in South Africa. The significance lies in what a successful state enforcement action against two of the world's largest crypto exchanges would signal to regulators globally. Coinbase and Gemini are used by South African players to purchase cryptocurrency before depositing at online gambling platforms, and broad product restrictions imposed by a US court could eventually influence how these exchanges operate internationally. Crypto sports betting operators available to South African players hold Curaçao licences and are not regulated by any South African authority. Players can review currently available options on our best crypto sports betting sites for South African players.

The complaints outline several specific allegations beyond the missing licence. Both Coinbase and Gemini allowed participants aged 18 to 20 to place bets, below the 21-year minimum New York law sets for mobile sports wagering. Wagers on fixtures involving New York college teams—a category state statute prohibits—were also accepted. By operating without a licence, both companies avoided paying the approximately 51% gross revenue tax that licensed bookmakers must pay, which the AG noted deprives the state of funding for schools, youth programmes, and addiction services.

A Widening Regulatory Campaign

The decision to pursue Coinbase and Gemini marks a significant escalation beyond the state enforcement actions already under way against Kalshi and Polymarket. Both targets of the New York lawsuits are major global exchanges with user bases spanning dozens of countries, making this intervention far more consequential than earlier actions against specialised prediction platforms. Coinbase's legal team responded that the company operates a “federally regulated national exchange registered with the CFTC,” the same defence Kalshi has deployed in courts across the country throughout 2026. Attorney General James's rejoinder was concise: “Gambling by another name is still gambling.”

For South African observers, the legal arguments being produced in these proceedings carry broader relevance. The question of whether a contract tied to a sporting outcome is a financial instrument or a gambling product has not been definitively settled in South African law either. South Africa's National Gambling Board has expanded its scrutiny of crypto-linked wagering products in recent years, and US court rulings on this question are likely to inform regulatory thinking across emerging markets. A federal appeals court found in Kalshi's favour against New Jersey last week, but an opposing ruling is anticipated from a separate circuit, and the matter may ultimately reach the US Supreme Court.

What to Watch

A New York court will likely convene a preliminary injunction hearing in the coming weeks to decide whether Coinbase and Gemini must suspend their prediction market operations during the litigation. The CFTC's formal response to the state lawsuits—expected before the end of April—will clarify whether the federal agency intends to intervene directly in support of the exchanges. South African players who use either platform as an on-ramp to crypto gambling deposits should monitor platform communications about product changes, as US enforcement actions can occasionally prompt exchanges to introduce restrictions beyond the targeted jurisdiction. With PSL football and the Springboks' domestic programme continuing through April, access to reliable crypto sports platforms remains a live concern for South African bettors.