Well, the state of New York filed two lawsuits on Tuesday against Coinbase and Gemini, saying these crypto firms crossed the line and violated the state's gambling laws by offering those prediction markets.

These lawsuits, filed in Manhattan, aren't just targeting sports betting — they also cover those markets tied to entertainment and politics that both companies have been offering.

The Attorney General, Letitia James, raised another issue: both Coinbase and Gemini allow 18-year-olds to gamble in these markets, even though the minimum age for betting there is 21.

She said something like this: changing the name doesn't change the essence; gambling is still gambling and must follow the state's rules. She added that these prediction markets are nothing more than illegal bets that also expose younger people to addictive platforms without sufficient protection.

In the lawsuit, New York is asking for a hefty payout: at least $2.2 billion from Coinbase and over $1.2 billion from Gemini.

Look, New York isn't the first to take a stance like this. Other states have also gone after these platforms for the same reason. Meanwhile, the companies, claiming to have backing from the Trump administration, argue that they're not offering regular bets but rather event contracts — which, according to them, are regulated at the federal level by an entity called the CFTC.

Well, look at this: because of the weight that New York carries in the financial regulation world — and also due to the resources the state has — their entry into this fight attracts a lot of attention. And there's another important detail: their laws allow the state to collect money from companies deemed illegal not just based on what they earned in New York, but across the entire country.

After the state filed a lawsuit against Coinbase and Gemini on Tuesday, Coinbase's legal chief, Paul Grewal, stated that the company will continue to advocate for these prediction markets to be overseen at the federal level, as Congress intended. When asked for more info, Coinbase just pointed to a post he made over on X.

In the meantime, the Attorney General of New York is tied up in another legal battle, this time with Kalshi, which is the biggest platform of this market type in the country. Last year, the company rushed to federal court in New York asking to block the state from suing them over gambling laws. So far, nothing has been decided. If this request gets denied, you can bet New York will go after Kalshi too, especially since they already issued an order for the company to halt operations back in October.

Some experts believe that this whole dispute — about who regulates these prediction markets — might end up being resolved at the Supreme Court of the United States.

Gemini has stayed mum, not responding when asked for comments. The Attorney General's office just told reporters to check out Letitia James's statement and the court documents.