NY SUES COINBASE, GEMINI OVER PREDICTION MARKETS

James claims both crypto exchanges are running unlicensed gambling operations without proper state authorization. The lawsuit also targets prediction markets that allow betting on outcomes involving New York college sports teams, which state law explicitly prohibits. "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. The action marks New York's escalating regulatory crackdown on prediction markets. These platforms, which allow users to bet on event outcomes ranging from political elections to sports results, have gained prominence in the crypto sector but face mounting legal scrutiny. Coinbase and Gemini have positioned their prediction market products as forecasting tools rather than gambling platforms. The distinction has become a focal point for regulators questioning whether crypto-based prediction markets circumvent traditional gambling restrictions. The lawsuits reflect broader tension between crypto innovation and state gambling regulations as prediction markets expand their user bases.