In a recent lawsuit, New York has targeted Coinbase and Gemini, alleging that their prediction market offerings constitute unlicensed gambling products. According to the lawsuit, these platforms have been promoting their prediction markets and acting as bookmakers, which is against state laws. The lawsuit also highlights that users are essentially 'bettors' and each contract is considered a bet.
Furthermore, the platforms allow individuals between 18 and 21 to place bets, which is prohibited in New York for those under 21. New York State Attorney General Letitia James 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 laws and regulations.
This lawsuit is part of a larger issue that has been taken up by multiple states, including Nevada and Washington, with the Commodity Futures Trading Commission arguing that prediction markets fall under its jurisdiction.