Negative reactions to cryptocurrency exchange Coinbase using its notifications to push bets on event contracts amid the March Madness basketball tournament range from “annoying” to “absurd.”

In January, Coinbase rolled out prediction market bets for US-based users as part of a partnership with Kalshi. However, for some users, the last two months have been seen as an opportunity for the exchange to get people “hooked on sports gambling” using an app that many had devoted to crypto trading.

“I have received three separate notifications about College Basketball from Coinbase in the past *hour* alone,” said X user AvgJoesCrypto on Thursday. “It is absurd that, amidst arguably the worst collapse in trust in this industry’s history, the largest American CEX has completely pivoted to trying to get their customer base hooked on sports gambling, so that they can extract even more exorbitant fees.”

Like sports event contract betting on platforms such as Kalshi and Polymarket, Coinbase Prediction Markets offers US-based users the chance to bet on the outcomes of a variety of events.

Prediction market platforms already face several lawsuits filed by state-level authorities, even as the federal regulator, the US Commodity Futures Trading Commission (CFTC), pushes for “exclusive jurisdiction” over the market.

John Palmer, co-founder of PartyDAO, expressed a similar sentiment over the Coinbase notifications, pushing bets on March Madness games:

“This is essentially encouraging me to gamble. What does that say about the internal philosophy around money management? Can I trust the yield sources on USDC interest, can I trust internal risk management, etc.”

In December, before the launch of its prediction market service, Coinbase filed lawsuits against regulators in Connecticut, Illinois and Michigan. The exchange argued, likely in anticipation of its prediction market launch, that the CFTC, not state-level gambling authorities, should regulate the platform.

Cointelegraph contacted Coinbase for comment on the user complaints, but had not received a response at the time of publication.

Related: Coinbase launches token-backed down payments for Fannie Mae loans

Congress seeks to ban politicians from using prediction markets amid insider information allegations

Amid user feedback and state-level lawsuits, many US lawmakers have also been calling for legislation to address issues in prediction markets. Allegations of someone in government using Polymarket to profit from a bet on the removal of Venezuelan President Nicolás Maduro have led to bills seeking to ban any US President or member of Congress from using the platforms.

Both Kalshi and Polymarket have introduced separate policies to curb insider trading. Kalshi said it would ban political candidates from trading on event contracts related to their campaigns, and Polymarket introduced measures to limit easily manipulated or ethically sensitive markets.

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