New York Attorney General Letitia James has filed lawsuits against the prediction market operations of Coinbase and Gemini. The legal action, filed in state court in Manhattan, alleges these platforms constitute illegal gambling under state law. James asserts the companies lack the required licenses and that the event contracts are “quintessentially gambling.” The lawsuits arrive amid a surge in prediction market popularity, exemplified by recent massive fundraising rounds for competitors Polymarket and Kalshi.
The Attorney General for New York filed a lawsuit against the prediction market arms of Coinbase and Gemini on Tuesday. The claim is that these platforms violate state laws against illegal gambling.
Attorney General Letitia James argues both companies have not obtained New York State Gaming Commission licenses to operate these markets. The petitions were filed in the state court in Manhattan.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” said AG James in a statement. The AG says the event contracts are “quintessentially gambling.”
In response, Paul Grewal, Chief Legal Officer at Coinbase, said the company will “continue to fight for the federal oversight of these markets that Congress intended.” The move comes as prediction markets are surging in popularity.
Polymarket recently aimed to raise another $400 million at a valuation of $15 billion. This follows its main competitor, Kalshi, raising $1 billion at a $22 billion valuation just weeks prior.
