Lawsuits filed on Tuesday seek to fine the prediction market operators three times their profits
New York Attorney General Letitia James is suing prediction market providers Coinbase and Gemini Titan for operating illegal gambling businesses in the state.
The lawsuits accuse Coinbase and Gemini of violating state laws by offering bets on events, including sports, entertainment, and elections, which constitutes illegal, unlicensed gambling.
Attorney General James is seeking court orders requiring Coinbase and Gemini to pay fines equal to three times their profits, forfeit illegal profits, and pay restitution to customers in New York.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” said James. “Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails.
“My office is taking action to protect New Yorkers and stop these platforms from violating the law.”
James argues that because the outcomes of the event contracts offered by the prediction markets are uncertain and outside the control of the bettor, they fit the legal definition of gambling in New York.
She adds that Coinbase and Gemini’s failure to obtain a license from the New York State Gaming Commission enables them to sidestep their obligation to pay taxes, as well as New York’s ban on betting by people under the age of 21.
The Attorney General’s lawsuits also allege that Gemini and Coinbase are violating New York laws that forbid any betting on games in which New York college teams participate.