New York Sues Coinbase and Gemini Over Prediction Markets

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.

According to the petitions filed in the state court in Manhattan, Attorney General Letitia James argues that both Gemini and Coinbase have not obtained New York State Gaming Commission licenses to operate these markets.

The AG also says that the event contracts that the platforms allow users to bet on are “quintessentially gambling.” This is because the outcomes of those events are typically outside the bettors’ control or amount to games of chance.

“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.

In response to the lawsuit, Paul Grewal, Chief Legal Officer at Coinbase, said that the company will “continue to fight for the federal oversight of these markets that Congress intended.”

The move comes at a time when prediction markets are surging in popularity. As CryptoPotato recently reported, Polymarket aims to raise another $400 million at a valuation of a whopping $15 billion, highlighting investor appetite and continuous expansion. Moreover, this came just a few weeks after Kalshi, Polymarket’s main competitor, raised a massive $1 billion at a $22 billion valuation.