New York Attorney General Letitia James (D) is suing two cryptocurrency exchanges operating prediction market platforms, alleging they skirt the state’s gambling laws.
The lawsuit appears to be the first targeting such prediction market platforms from the state’s top law enforcement official. It names as defendants Coinbase Financial Markets, Inc., and Gemini Titan LLC. Both companies offer prediction markets and are tied to parent cryptocurrency exchanges Coinbase and Gemini.
James accused the platforms of “illegally running gambling operation” in a statement and pointed to Coinbase and Gemini allowing users to trade on sports events, entertainment, and elections in violation of New York laws.
In New York, sports betting is legal but authorized and regulated through the New York Gaming Commission. Only residents 21 years or older are allowed to bet.
Neither Coinbase nor Gemini has a license from the state gaming commission and have “sidestepped their obligation to pay taxes like licensed casinos and mobile sports gambling platforms do,” James said. She added that the platforms expose underage New Yorkers to financial risk.
The office is seeking fines, forfeiture of profits, and damages for customers.
“Because the outcomes of these events are uncertain and outside the control of the bettor, or hinge on a game of chance, these prediction market platforms fit the legal definition of gambling in New York,” James said.