New York attorney general sues Coinbase and Gemini over prediction markets

New York Attorney General Letitia James has filed lawsuits against Coinbase Financial Markets and Gemini Titan, alleging the companies are operating illegal gambling operations through their prediction markets. The lawsuits claim both platforms are running unlicensed gambling operations that violate state laws. The complaints also allege the services break New York regulations that prohibit betting on games involving the state's college sports teams. "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution," James said in a statement. "Gemini and Coinbase's so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails." New York joins several other states that have taken legal action against prediction markets in recent months. However, these state efforts face a potential challenge from federal regulators. Earlier this month, the U.S. Commodity Futures Trading Commission sued Arizona, Connecticut and Illinois over their attempts to regulate prediction markets. The CFTC argued it should be the sole regulator for such platforms and called the states' actions an overreach of authority. The lawsuits represent the latest regulatory scrutiny facing prediction markets, which allow users to bet on outcomes of political elections, sporting events, and other future occurrences. The legal actions highlight ongoing tensions between state and federal authorities over jurisdiction for emerging financial technologies.