New York Attorney General Letitia James has initiated a lawsuit against Coinbase and Gemini, alleging that their prediction market platforms operate as illegal gambling without the required licenses. Filed in Manhattan, the lawsuit contends that these platforms expose young individuals to addictive gambling-like activities lacking necessary regulatory oversight. James emphasized that 'gambling by another name is still gambling,' reinforcing the need for compliance with state laws. The lawsuit seeks to bar the companies from operating in New York until they secure licenses from the state Gaming Commission, which oversees gambling operations. Both companies, originally cryptocurrency trading platforms, have expanded into prediction markets, competing with established players like Kalshi and Polymarket. The lawsuit also points out that by operating without licenses, Coinbase and Gemini evade significant taxation, approximately 51% of gross revenues, that licensed casinos and mobile sportsbooks must pay. Furthermore, the platforms allow users as young as 18, contrary to state regulations that prohibit gambling by individuals under 21. The case adds to ongoing regulatory scrutiny faced by prediction market operators, with Kalshi currently in litigation against the state Gaming Commission over similar issues.