New York is taking on a pair of prediction market exchanges in court.
Key Takeaways
- New York seeks to take punitive measures against Coinbase and Gemini Titan.
- The Attorney General accused the pair of running “illegal gambling operations.”
- Kalshi wasn’t named in the latest lawsuit.
State Attorney General Letitia James announced her office filed a lawsuit in a Manhattan Supreme Court on Tuesday against Coinbase and Gemini Titan for operating “illegal gambling operations.” New York is pursuing $2.2 billion in damages from Coinbase alone.
The New York Attorney General's Office is seeking a minimum of $1.2 billion in damages against Gemini. pic.twitter.com/YjAgt69XEi
— Daniel Wallach (@WALLACHLEGAL) April 21, 2026
James is also seeking a temporary restraining order and preliminary injuncction to fine the two companies, force them to forfeit profits, and pay user restitution for offering sports and other event contracts that the state deems as betting. Neither is licensed to operate in the Empire State.
The attorney general cites a New York law that “empowers the office to bring a special proceeding for injunctive relief, restitution, and damages whenever a person or business engages in ‘repeated or persistent fraud or illegality.’”
New York Executive Law § 63(12) empowers the OAG to bring a special proceeding for injunctive relief, restitution, and damages whenever a person or business engages in “repeated or persistent fraud or illegality.” pic.twitter.com/eoMaAfPv5g
— Daniel Wallach (@WALLACHLEGAL) April 21, 2026
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” James said in a statement. “Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails. My office is taking action to protect New Yorkers and stop these platforms from violating the law.”
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Defining gambling
While prediction markets fall under the jurisdiction of the federal Commodity Futures Trading Commission (CFTC), New York is one of several U.S. states with licensed, regulated sports betting that has challenged trading exchanges in court.
Coinbase, a popular crypto trading exchange, began offering event contracts on sports, elections, and entertainment in January. Gemini Titan is a platform developed by Gemini Space Station that the CFTC approved as a Designated Contract market in December 2025.
“Because the outcomes of these events are uncertain and outside the control of the bettor, or hinge on a game of chance, these prediction market platforms fit the legal definition of gambling in New York,” James' office stated.
New York officials also take exception to platforms allowing users to trade at 18 years old in a state where the legal betting age is 21, as well as prediction market companies failing to pay state taxes on their trades. New York prohibits sports betting on in-state collegiate teams, something prediction market sites offer, which the Attorney General also says violates Empire State law.
Lucrative state
The New York sports betting market is the most lucrative in the U.S. The state’s eight online sportsbooks and retail shops generated over $2.5 billion in gross revenue last year in a jurisdiction with a 51% tax rate on mobile operators.
The Empire State has strict wagering laws generally enforced by the New York State Gaming Commission. Both the regulatory body and the Attorney General’s Office have previously issued desist orders and taken punitive measures against platforms that have not complied with the gaming rules and laws.
New York didn’t name Kalshi, a popular prediction market platform that is involved in legal battles with a dozen states, in the most recently filed lawsuit. The state is awaiting a court ruling on Kalshi’s motion for a preliminary injunction to keep the Attorney General from taking civil and criminal action against the trading exchange, according to gaming attorney Daniel Wallach.
