New York Attorney General Letitia James has sued Coinbase and Gemini, accusing them of running illegal gambling operations through unlicensed “prediction market” platforms.

The lawsuit argues that the companies are offering wagering disguised as event-based trading and are therefore subject to state gambling laws.

Officials say the platforms bypass licensing requirements, avoid casino tax rates, and allow users as young as 18, below New York’s 21+ gambling age.

Coinbase and Gemini, which expanded from crypto trading into prediction markets, are among several firms facing regulatory challenges over the legality of such products, the AP has reported.

The case adds to ongoing legal disputes nationwide over whether prediction markets fall under state gambling rules or federal financial regulation.