Key Takeaways:
Reuters reported that New York AG Letitia James sued Coinbase and Gemini on April 21 for operating unlicensed prediction markets. Both platforms allowed users aged 18 to 20 to wager, violating New York’s 21-and-older sports betting law. James seeks triple civil fines, customer restitution, and a ban on college campus marketing by both firms.
New York Attorney General Targets Coinbase and Gemini in Prediction Market Crackdown
Reuters New York contributor, Jonathan Stempel, reported that Letitia James filed the complaints in Manhattan state court, accusing both crypto exchanges of running markets where users trade on the outcomes of sports events and elections without holding New York State Gaming Commission licenses. Bloomberg also reported on the legal action.
The filings mark the first major state-level enforcement action targeting prediction markets offered by major cryptocurrency platforms. James argued the platforms meet New York’s legal definition of gambling because outcomes are determined by chance or factors outside users’ control. Her office stressed that the definition applies regardless of how the companies characterize their products.
Both companies allegedly allowed users between 18 and 20 years old to participate, according to the complaints. New York law sets the minimum age for mobile sports betting at 21.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” James argued in a statement issued alongside the filings, Reuters reported on Tuesday.
The attorney general is seeking to recover illegal profits, civil fines equal to three times those profits, and restitution for affected customers. James also asked the court to bar Coinbase and Gemini from accepting wagers from users under 21 and from advertising their platforms on college campuses.
