In a recent lawsuit, New York has targeted Coinbase and Gemini, alleging that their prediction market offerings constitute unlicensed gambling products. The lawsuit claims that these platforms have been advertising their prediction markets and acting as bookmakers, which is deemed a violation of state laws.
Furthermore, the lawsuit argues that the platforms allow individuals between the ages of 18 and 21 to place bets, despite New York's laws prohibiting anyone under 21 from participating in mobile app gambling. The state's attorney general, Letitia James, has stated that both Gemini and Coinbase's products are 'illegal gambling operations,' emphasizing that 'gambling by another name is still gambling' and is subject to state regulations. This lawsuit is part of a broader trend, with other states such as Nevada and Washington also taking action against prediction market providers.
The Commodity Futures Trading Commission has countered that prediction markets fall under its jurisdiction, and the issue is likely to be decided by the U.S. Supreme Court. Coinbase has vowed to fight for federal oversight, while Gemini has declined to comment on the matter.