In a lawsuit filed on Tuesday, New York alleged that Coinbase and Gemini's predictive market offerings constitute unlicensed gambling products. The lawsuit claims that these platforms operate as bookmakers, allowing users to place bets on various outcomes, including sports and entertainment events. Furthermore, the suit argues that the platforms enable individuals between the ages of 18 and 21 to participate, which contravenes New York's law prohibiting those under 21 from engaging in mobile app gambling.
The state's attorney general, Letitia James, characterized the companies' products as 'illegal gambling operations,' emphasizing that alternative names for gambling do not exempt them from regulatory oversight. This development is the latest in a series of similar lawsuits filed by other states, including Nevada and Washington, with the issue likely to be decided by the U.S.
Supreme Court. Coinbase has stated its intention to contest the lawsuit, asserting that predictive markets fall under federal regulation.
Gemini declined to comment on the matter.