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 against state laws.
Furthermore, the lawsuit highlights that the platforms allow individuals between the ages of 18 and 21 to place bets, which is prohibited in New York for those under 21. The state's argument is that the prediction market platforms are essentially providing a form of gambling, where users can stake money on the outcome of events beyond their control.
This lawsuit is part of a broader trend, with other states like Nevada and Washington also taking legal action against prediction market providers. The issue is likely to be decided by the U.S. Supreme Court.
In response, Coinbase has stated that it believes prediction markets fall under federal regulation and will fight for this oversight. Gemini has declined to comment on the matter. The Commodity Futures Trading Commission has also weighed in, arguing that prediction markets, including those related to sports, fall under its jurisdiction.
Another major prediction market provider, Kalshi, was not named in the lawsuit but has previously taken legal action against the New York State Gaming Commission, seeking a ruling that its platform is not subject to state gambling laws.