New York Attorney General Letitia James has initiated lawsuits against Coinbase Financial Markets (NASDAQ:COIN) and Gemini Titan, alleging that prediction market features on their platforms run afoul of state gambling statutes.
The complaints, which were filed in Manhattan state court, assert that both companies operated markets where participants place trades on the outcomes of events - including sporting events and elections - without having obtained required licenses from the New York State Gaming Commission. According to the filings, those missing licenses are necessary for any operation that meets the state's statutory definition of gambling.
The attorney general contends the outcomes traded on these prediction markets are outside of bettors' control or otherwise amount to games of chance, which brings them squarely within New York's legal definition of gambling. The filings also allege that the platforms permitted access to users aged 18 to 20, notwithstanding a state-imposed minimum age of 21 for mobile sports betting.
In a statement included with the complaints, James said, "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution."
The remedies the attorney general seeks are comprehensive. The lawsuits ask the court to order recovery of alleged illegal profits, impose civil fines equal to three times those profits, and require restitution to affected customers. Beyond monetary relief, the complaints seek injunctive measures - including barring both companies from allowing users under 21 to participate in wagers on their platforms and prohibiting marketing targeted at college campuses.
Context and implications:
- Regulatory focus - The filings frame the prediction markets as subject to the same licensing and age-restriction rules that govern traditional mobile sports betting in New York.
- Enforcement actions requested - The attorney general is pursuing both financial remedies (disgorgement, treble fines, restitution) and operational restrictions (age limits, campus marketing prohibitions).
- Scope - The complaints specifically identify event-based markets, such as those tied to sports and elections, as central to the alleged violations.
The complaints are pending in state court, and the filings outline the legal theory and relief sought by the attorney general without resolution at this stage.