New York Attorney General Letitia James sued Coinbase Financial Markets and Gemini Titan on Tuesday, accusing the two companies of illegally offering prediction market products in the state without securing the licenses required for gambling operations.
The lawsuits, filed in Manhattan state court, focus on markets that allow users to trade on the outcomes of events including elections and sports. James said the event contracts offered by Coinbase and Gemini amount to gambling under New York law because the results are outside the control of participants and often depend on chance, according to Reuters.
“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.
State Targets Licensing and Age Access
According to the complaints, neither Coinbase nor Gemini obtained approval from the New York State Gaming Commission before making the products available in the state. James also said the platforms allowed users aged 18 to 20 to take part, despite a New York law that sets 21 as the minimum age for mobile sports betting.
The attorney general is seeking to recover what she described as illegal profits, impose civil penalties equal to three times those amounts and secure restitution for customers. She is also asking the court to block the companies from allowing users under 21 to place wagers and from marketing their platforms on college campuses.
Expansion Draws Wider Scrutiny
The cases come as prediction markets expand beyond crypto, attracting brokerages, social media platforms and exchanges seeking to tap demand for event-based trading.
Binance is the latest major platform to move into the sector, adding a prediction markets feature to its app that allows Binance Wallet users to access probability-based trading on real-world outcomes through markets provided by Predict.fun on the BNB Smart Chain.
Its move follows a broader industry push, with Robinhood launching a prediction markets hub in March 2025 and X entering the sector in June 2025 by naming Polymarket its official prediction market partner.
Crypto exchanges have also expanded access, with MEXC launching prediction market trading on its existing platform and Gate.io later introducing Polymarket-powered event contracts that allow users to trade yes-or-no outcomes tied to global events directly from their exchange accounts.
Traditional Finance Tests the Model
The trend is no longer limited to crypto-native businesses. Nasdaq’s MRX options exchange has filed with U.S. regulators for approval to launch outcome-linked options tied to the Nasdaq-100, contracts that would pay a fixed cash amount depending on whether the index closes above or below a selected level at expiry.
New York’s lawsuits add fresh pressure to that fast-growing market, as regulators and state authorities increasingly confront whether prediction markets should be treated as financial products or as gambling under existing laws.
