The New York Attorney General’s Office has initiated legal action against Coinbase Financial Markets, Inc. and Gemini, Titan LLC, accusing the two cryptocurrency firms of illegally operating gambling platforms within the state. The lawsuit asserts that both companies offer “prediction markets” for users to place bets on various outcomes, including sports, entertainment, and political events, in direct violation of New York law.
An investigation revealed that these prediction markets qualify as unlicensed gambling operations, a conclusion that raises significant concerns for public safety, particularly for younger users under the age of 21. Attorney General Letitia James emphasized the risks associated with these platforms, highlighting that they expose vulnerable individuals to potentially addictive behaviors without adequate consumer protections in place.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” Attorney General James stated. Her office is pursuing court orders to mandate restitution to affected customers, impose fines, and require the companies to forfeit any illegal profits garnered from their operations.
Despite being marketed to individuals over 18, these prediction markets inherently involve uncertainty and chance, aligning them with the legal definition of gambling in New York. Furthermore, the companies have neglected to secure the required licenses from the New York State Gaming Commission, avoiding taxes that would typically contribute to education initiatives and programs designed to assist individuals struggling with gambling addictions.
The lawsuit also cites concerns about the accessibility of these platforms to those aged 18-20, despite existing regulations that necessitate participants to be at least 21 years old for mobile sports betting. Early exposure to gambling can have severe implications for mental health, with studies indicating that it may lead to heightened risks of depression, anxiety, and financial stress.
Additionally, the complaint claims violations of state laws prohibiting bets on games featuring New York college teams, further complicating the legal standing of these platforms.
In light of these developments, Attorney General James has reiterated her commitment to consumer protection, particularly within the crypto and gambling industries. Her office has previously undertaken measures to address illegal gambling, including a 2026 lawsuit against Valve for promoting gambling in video games popular among youth, and actions against multiple online sweepstakes casinos.
New Yorkers are being urged to ensure that any gambling platforms they engage with are registered with the New York State Gaming Commission, and to report any potential misconduct or gaming fraud through the Attorney General’s office, maintaining anonymity if preferred.
The case is being prosecuted by a dedicated team within the Office of the Attorney General, indicating a robust response to perceived violations of state law in the rapidly evolving landscape of online gambling and cryptocurrency. This action comes as part of ongoing efforts to safeguard New Yorkers from unlawful and potentially harmful betting practices.
