Lawsuit: Coinbase and Gemini for illegal bets
Lawsuit against Coinbase and Gemini illegal bets
New York Attorney General Letitia James has filed lawsuits against Coinbase Financial Markets, Inc. and Gemini, Titan LLC, alleging that both companies are operating illegal gambling businesses in New York through their “prediction market” platforms.
According to the Attorney General’s office, these platforms allow users to wager money on the outcomes of future events such as sports games, entertainment awards, and elections. The state argues that because these outcomes are uncertain and depend on chance, the services meet the legal definition of gambling under New York law.
The lawsuits claim that Coinbase and Gemini have been offering these betting services without obtaining the required licenses from the New York State Gaming Commission. As a result, they are allegedly bypassing regulatory requirements that apply to licensed casinos and sports betting operators, including tax obligations that fund public services such as education, youth sports programs, and problem gambling support.
A key concern raised in the lawsuits is that these platforms are accessible to users aged 18 to 20, despite New York law requiring individuals to be at least 21 years old to participate in mobile sports betting. The Attorney General argues that this exposes younger adults to financial harm and increases the risk of gambling-related addiction.
The complaint also alleges that Coinbase and Gemini allow betting on events involving New York college sports teams, which is prohibited under state law. Officials claim this further demonstrates violations of gambling regulations designed to protect consumers and maintain fair oversight.
Attorney General James stated that rebranding gambling as “prediction markets” does not change its legal status. She emphasized that these platforms operate without proper safeguards and expose users, including young adults, to addictive gambling behaviors and potential financial loss.
The lawsuits reference research from health organizations, including findings from the National Institutes of Health indicating that early exposure to gambling increases risks of mental health issues such as anxiety, depression, and financial stress. The American Psychological Association has also reported a correlation between gambling disorders and suicidal ideation in a significant portion of affected individuals.
The Attorney General is seeking court orders requiring both companies to pay financial penalties, surrender profits obtained through the alleged illegal operations, and provide restitution to affected consumers. She is also requesting damages equal to three times the profits earned from the activities in question.
This action is part of a broader enforcement effort by the New York Attorney General’s Office targeting illegal gambling and unregulated digital financial platforms. Previous actions include lawsuits and shutdowns of online sweepstakes casinos and legal measures against companies accused of promoting gambling-like mechanics in video games accessible to minors.
The office has issued consumer warnings advising residents to verify that any gambling-related platform is properly registered with the New York State Gaming Commission. It also encourages individuals to report suspected violations or fraudulent gaming activities through official complaint channels, including anonymous reporting options.
The cases are being handled by the Investor Protection Bureau within the Division of Economic Justice, with involvement from multiple assistant attorneys general and investigative staff. The Attorney General’s office states that these actions aim to enforce state gambling laws, protect consumers, and ensure that digital betting platforms comply with regulatory standards applicable in New York.
Source: https://ag.ny.gov/press-release/2026/attorney-gene