New York Attorney General Letitia James sued Coinbase and Gemini on Tuesday, accusing the two companies of violating state gambling laws with their prediction markets.

James argues that the platforms fall within the state’s definition of gambling and, as a result, are running afoul of state tax obligations and gambling restrictions on New Yorkers under 21 years old.

“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.

“Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails,” she continued. “My office is taking action to protect New Yorkers and stop these platforms from violating the law.”

Coinbase’s chief legal officer, Paul Grewal, said in a post on X that “prediction markets are federally regulated national exchanges” under the Commodity Futures Trading Commission (CFTC).

“This issue is proceeding in New York federal court as we speak,” he added. “Coinbase will continue to fight for the federal oversight of these markets that Congress intended.”

Another prediction market, Kalshi, previously sued New York over its efforts to regulate the platform.

The lawsuit against the two firms, which both announced a push into prediction markets late last year, marks the latest in a series of legal issues with states over the platforms.