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Gemini (NASDAQ: GEMI) is pivoting hard from ‘crypto’ to ‘markets,’ although the legal challenges facing prediction markets could mean Gemini is leaping from the frying pan into the fire.
- Gemini lost $589 million in 2025
- CFTC chair calls prediction markets ‘decentralized truth’
- States defending sports betting turf against CFTC’s sharp elbows
- Arizona files criminal charges v Kalshi
- Polymarket signs MLB deal
- Predicting death and destruction for fun and profit
The Gemini digital asset exchange reported its Q4/FY25 financial results on Thursday, showing revenue of $60.3 million in the final three months of 2025, a new company record and nearly 40% better than revenue in the final quarter of 2024.
However, Gemini booked a net loss of $140.8 million in Q425, more than 5x its losses from Q424. The net loss for 2025 as a whole was nearly $589 million vs. a $151 million loss in 2024. (The need to trim these losses may explain why so much of Gemini’s C-suite pulled their ejector seat levers last month.)
Gemini reported a 17.3% year-on-year rise in Q4’s number of monthly transacting users, but trading volume was down in both the retail (-38.4%) and institutional (-22%) segments. Overall trading revenue was down more than one-fifth in Q4 to $24.5 million despite institutional revenue nearly doubling year-on-year to $3.4 million.
Gemini’s branded crypto-linked (BTC, XRP, SOL, and ZEC) credit card segment was the lone bright spot, as card signups soared from 38,000 at the end of 2024 to 145,000 by the time 2025 drew to a close. Card revenue was just under $16 million in Q4, up fourfold from the year before, pushing FY25 card revenue up 185% to $33.1 million.
But sod all that. Going forward, Gemini is all about prediction markets. Gemini Predictions launched last December, and Gemini is betting the farm on it being the success that has largely eluded the company to date.
The language Gemini uses to hype its new offering is truly hyperbolic, comparing prediction markets to the launch of the public press and the internet. This “sixth estate” is bubbling away in a “cauldron of promethean fire” in which, fortunately, Gemini finds itself up to its neck.
And yet, shortly before Gemini’s financial results were released, the Winklevoss twins—founders Cameron and Tyler—backed out of their post-earnings call with analysts, deferring that reckoning until Friday. Were they hoping analysts might be less inclined to ask where it all went wrong if they had a night to sleep on it? Or did the twins just need to go to the hospital to get those third-degree promethean burns checked out?
Gemini’s shares closed Thursday up less than 1% to $6.01 but gained nearly 6% in after-hours trading. For the year-to-date, the share price is down nearly 40% and nearly 84% below its peak in the immediate aftermath of Gemini’s listing on the Nasdaq last September.
The day also saw irate investors file a class action suit against the company and the Winklevii for overstating “the viability of its core business as a crypto platform” ahead of its Nasdaq debut. Gemini is also accused of hyping its international growth potential before last month’s abrupt shutdown of its international operations to focus solely on the U.S. market (and Singapore), while failing to offer investors advance notice of Gemini’s prediction pivot.
CFTC says Gemini is backing a winner
There may be no better time for Gemini to pivot to prediction markets, given the full-throated support the sector is getting from American regulators. This week, Commodity Futures Trading Commission (CFTC) Chair Michael Selig gave a speech at the Blockchain Summit 2026 in which he celebrated prediction markets as a key plank of the “revolution for trust within information systems.”
Selig claimed prediction markets “function as a forum for decentralized truth” by making clear “the critical information influencing what later will be deemed to be true or false … Protecting the freedom to transact in prediction markets should not be a controversial or partisan issue, it is essential.”
Selig later tweeted a clip from his Summit speech in which he claimed the marriage of prediction markets and blockchain technology would demonstrate “how decentralized trust and truth can act as a check on disinformation, outright falsity, and the threat of debanking.”
Tyler Winklevoss retweeted Selig’s post, adding that prediction markets were a “truth machine” that could replace Americans’ lost faith in “experts and the media.” Okay, but can they replace America’s sportsbooks?
States not backing down from sports betting regulatory turf war
Last month, Selig declared war on state authorities who dared to restrict prediction markets’ ability to offer their pseudo-betting products without state gambling licenses. Selig claimed the CFTC holds exclusive jurisdiction over entities offering ‘event contracts’ and vowed to take states to court if they dared set a toe on what he claims is the CFTC’s turf.
The problem is, America has a lengthy and well-documented history of giving states nearly total control over gambling within their respective borders. On a personal level, speaking as someone who covered gambling industry news for 11 years on behalf of someone who founded a prominent gambling site, prediction markets are gambling. End of story.
State and federal courts appear to agree. The Kalshi prediction market lost a federal court ruling in Nevada last month that cleared the way for the state’s gaming regulators to sue the company for “illegal sports gambling.” On March 12, the U.S. District Court for the District of Nevada denied Kalshi’s bid to stay the charges while Kalshi appealed the February ruling to the Ninth Circuit Court of Appeals. On Thursday, the Ninth Circuit denied Kalshi’s emergency motion.
In late January, a Nevada state court issued a temporary restraining order against Kalshi rival Polymarket, which the Nevada Gaming Control Board accuses of offering similarly “unlicensed wagering.” The ruling in that TRO rubbished Polymarket’s claims that the Commodities Exchange Act (CEA) grants the CFTC “exclusive jurisdiction” over Polymarket’s ‘contract markets.’
The ruling goes further, saying that allowing “an unlicensed participant” in Nevada’s gambling market messes with the Board’s ability “to fulfill its statutory functions.” These duties include ensuring that individuals “who are in a position to influence the outcome of a sporting event” (coaches, players, trainers, etc.) aren’t wagering on that event.
Other states are taking an equally dim view of prediction markets horning in on their action. In January, a Massachusetts judge approved a preliminary injunction sought by the state’s Attorney General to prevent Kalshi from offering bets to state residents without a state license.
On March 9, the U.S. District Court for the Southern District of Ohio rejected Kalshi’s bid for a preliminary injunction against the Ohio Casino Control Commission’s desire to enforce its gambling laws.
Judge Sarah Morrison rubbished Kalshi’s claim that its markets are actually ‘swaps’ as defined by the CEA. Morrison said currency exchange rates, weather, and energy costs meet that definition, but “the number of points scored in the Huskies-Bobcats game does not.” Morrison added that “history reveals no evidence that Congress intended to pre-empt state sports gambling laws.”
The next day, the U.S. District Court for the Western District of Michigan rejected Polymarket’s bid for a TRO against the state’s Attorney General’s desire to enforce state gambling laws against both Polymarket and Kalshi.
The prediction markets have won the odd legal skirmish, including a February ruling in Tennessee that granted Kalshi a preliminary injunction against state gaming regulators enforcing their betting laws.
The differing opinions likely presage an inevitable hearing before the U.S. Supreme Court, which, if you’ll recall, unleashed America’s betting beast in a 2018 ruling that overturned the federal prohibition on sports betting outside Nevada and New Jersey. For what it’s worth, that ruling found that the federal government was improperly intruding on state’s rights to control what goes on within their borders.
Arizona files criminal charges v Kalshi
The states’ fight against unauthorized gambling found a higher gear on March 17 when Arizona Attorney General Kris Mayes filed criminal charges against Kalshi’s parent companies for “operating an illegal gambling business in Arizona without a license as well as for election wagering.”
Arizona requires betting operators to hold a license if they want to serve state residents, and the state bans election betting outright. The 20 counts filed against Kalshi cite markets offering wagers on four election contests (one federal, three Arizona-focused), along with various sports wagers and whether the voter-ID-focused SAVE Act will become law. (For the record, the Arizona charges are misdemeanors, not felonies, and no Kalshi execs were named in the filing.)
The release announcing the charges quoted AG Mayes saying, “Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law. No company gets to decide for itself which laws to follow. Arizona will not be bullied into letting any company place itself above state law.”
In response, Kalshi issued a defiant statement that said “sadly, a state can file criminal charges on paper thin arguments … States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it.”
Leaning on its CFTC bodyguard, Kalshi said its operations are “subject to federal jurisdiction. It’s different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.”
And yet, Polymarket recently introduced ‘five-minute’ bets, markets that resolve within shorter durations than most. These markets are proving immensely popular with the site’s customers, leading one researcher to predict we’ll soon see the launch of “crazy things, like one-minute markets or something like that,” because “people just want to get to the resolution time faster and faster and faster.”
Sports bettors will recognize this phenomenon from the previous decade’s rise of ‘in-play’ betting, which allowed bettors to avoid having to wait until the end of a match to learn if their wager was a winner. Companies like Bet365 became global giants after making in-play bets the focus of their operations, but critics claimed they relied on bettors making impulsive financial decisions they’d later regret.
Polymarket signs MLB deal, agrees to betting integrity obligations
Prediction markets might have a better argument to make regarding the ‘swaps v betting’ distinction if they weren’t so heavily reliant on sports ‘markets.’ Sports wagers make up the single largest slice of both Kalshi’s and Polymarket’s event categories, with sports accounting for 85% of Kalshi’s notional volume.
In a bid to show they’re at least trying to police their platforms for potential manipulation, prediction markets have been striking official partnerships with professional sports leagues. Last October, both Kalshi and Polymarket became official prediction market partners of the National Hockey League, deals that reportedly imposed ‘integrity provisions’ that match those required of the NHL’s sports betting partners.
On Thursday, Major League Baseball (MLB) named Polymarket the league’s ‘official prediction market exchange’ in a deal that includes “comprehensive integrity commitments” from Polymarket. These include “working together to restrict markets that present an integrity risk to MLB, such as individual pitches, manager decisions, and umpire performance, among others.”
While MLB’s deal with Polymarket is exclusive, MLB “intends to have integrity relationships with all other prediction market exchanges offering baseball contracts.”
MLB simultaneously announced a memorandum of understanding with the CFTC that “memorialized a clear intent to share information with each other regarding the integrity of professional baseball and related prediction markets.” MLB execs will meet with their CFTC counterparts to “identify and discuss any issues that may impact the integrity of MLB’s games and the MLB prediction market landscape.”
Just an observation, but it probably doesn’t help Kalshi/Polymarket’s ‘we’re not gambling’ arguments when major sports leagues are requiring them to abide by the exact same ‘integrity’ rules that traditional betting operators are required to follow.
News of the deal brought a blistering response from the American Gaming Association, whose president/CEO Bill Miller said the MLB deal “isn’t just disappointing, it’s dangerous.” Miller accused Kalshi and Polymarket of doing “an end-run around” the reality that wagering “operates under state and tribal regulation … sports betting—by any name—is not under the CFTC’s jurisdiction.”
DC Dems seek ban on ‘death markets’
Meanwhile, the growing sense that Washington power brokers are using sensitive inside information to trade on prediction markets has been a source of controversy for some time. These protests have grown louder after it became clear that insiders were trading on information related to America’s recent military escapades.
Last week, two Democratic politicians from California, Rep. Mike Levin and Sen. Adam Schiff, introduced the DEATH BETS Act (Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act). The act would amend the CEA to prohibit prediction markets from offering any market that “involves, relates to, or references terrorism, assassination, war, or any similar activity.”
In February, Schiff and five other Dem senators sent CFTC Chair Selig a letter urging him to “uphold U.S. law and take action to halt prediction contracts that involve betting on physical injury, death or war, and to vigorously enforce the law through oversight and regulation of this market.”
If you’re wondering how these types of betting markets could go awry, consider that Polymarket users were making bets on what targets in Israel might be next to suffer a missile strike, while publicly musing about seemingly attractive targets alongside mapping data showing exactly where those targets are located.
One final note on the inescapable similarities between ‘predicting’ and betting. An Israeli journalist who recently wrote an online account of a seemingly harmless missile strike soon began receiving death threats, apparently from Polymarket bettors who’d wagered on the next missile landing somewhere else.
Athletes have been exposed to this type of communication for years. The Atlantic recently reported how French tennis player Caroline Garcia received similar messages when her play on the court failed to match some bettor’s expectations. Garcia “got so many deranged messages over the years—so many slurs and death threats, so many fuck you s and kill yourself s—that they started to feel like background noise.”
The future of finance, folks. But not betting.
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