New York has become the most recent state to challenge the operations of prediction markets. Attorney General Letitia James filed a lawsuit against Coinbase Financial Markets and Gemini Titan, alleging that the companies are operating unauthorized gambling services. The complaint additionally asserts that these platforms contravene state statutes banning wagers on collegiate athletic events featuring New York teams.
"Whether called gambling or something else, it remains gambling and must comply with our state laws and Constitution," James declared. "The prediction markets from Gemini and Coinbase are essentially unlawful betting ventures, putting youth at risk with habit-forming sites that miss essential safeguards."
A number of states have pursued parallel initiatives in response to the growth of prediction markets, though federal hurdles could now impede them. In recent weeks, the U.S. Commodity Futures Trading Commission brought a case against three states that had accused prediction markets of unlicensed gambling activities. The agency maintained that it alone possesses regulatory authority over prediction markets and labeled the moves by Arizona, Connecticut, and Illinois as unauthorized extensions of power.