New York lawsuit accuses Coinbase and Gemini of enabling illegal gambling

Key Points:

• New York Attorney General Letitia James filed a lawsuit against Coinbase and Gemini, accusing their unlicensed prediction market platforms of operating illegal gambling businesses without state regulation or licenses.
• The lawsuit demands the companies cease operations in New York unless they obtain licenses from the state Gaming Commission and highlights concerns about exposing young people to addictive gambling without proper safeguards.
• New York alleges Coinbase and Gemini avoid paying taxes comparable to licensed casinos and sportsbooks, and allow users as young as 18 to participate, violating state laws prohibiting wagering under age 21.
• Both companies argue their prediction markets are federally regulated derivatives exchanges under the Commodity Futures Trading Commission (CFTC), a position supported by recent federal court rulings blocking state regulatory efforts.
• The dispute follows similar legal battles involving Kalshi and Polymarket, with ongoing debates over state versus federal jurisdiction and consumer risks associated with unregulated prediction markets.