New York Attorney General Letitia James sues Coinbase, Gemini, calls their prediction markets illegal gambling

New York Attorney General Letitia James is suing the backers of two prominent prediction markets, calling them illegal gambling. 

James recently filed lawsuits against Coinbase Financial Markets, Inc. and Gemini, Titan LLC. 

"Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and constitution," James said. "Gemini and Coinbase's so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails."

Prediction markets, James says, "allow users to bet money on the outcome of a wide range of future events, from sports games to elections to award shows." They therefore fit the definition of gambling in the Empire State, James said. 

According to the lawsuit, Coinbase "offered bettors the ability to wager on whether the New York Knicks would win a basketball game by over 6.5 points or who would win the February 8, 2026, Super Bowl or college basketball games, such as the February 14, 2026, game between St. John's University and Providence College," and Gemini "offered bettors the ability to wager on whether the New York Mets would win a baseball game by more than 1.5 runs, or who would win the February 8, 2026, Super Bowl or college basketball games such the February 25, 2026, game between St. John's University and the University of Connecticut."

Neither Coinbase nor Gemini have a license from the New York State Gaming Commission, she said, and therefore aren't paying taxes like other casinos and gambling platforms do. She went on to claim that the platforms also allow betting on college games, in violation of the law.

The lawsuits seek forfeiture of the "illegal profits," restitution to consumers, and fines totaling three times their profits.

"Prediction markets are federally regulated national exchanges, registered with the CFTC. This issue is proceeding in New York federal court as we speak. Coinbase will continue to fight for the federal oversight of these markets that Congress intended," a Coinbase spokesperson said.

CBS News New York has reached out to Gemini for comment.

James previously sued video game giant Valve, alleging their "loot boxes" amounted to a gambling scheme.