NYAG Sues Prediction Markets, as in Violation of State Gaming Law

New York Attorney General Letitia James ("AG") sued Coinbase Financial Markets, Inc. and Gemini Titan LLC (see here and here) alleging that both companies operated illegal, unlicensed gambling platforms in the State through their prediction market products.

In these Complaints, filed in the Supreme Court of the State of New York, the AG alleged that the prediction markets - which allow users to bet on the outcomes of sports events, elections, and entertainment events - met the legal definition of gambling under New York law because their outcomes are uncertain and outside the control of the bettor. The AG further alleged that neither company obtained a license from the New York State Gaming Commission, depriving the State of tax revenue that funds public schools, youth sports programs, and problem gambling treatment. The AG also alleged that both platforms were available to users between the ages of 18 and 20, in violation of New York's minimum gambling age of 21, and that both companies permitted betting on games involving New York college teams, which is prohibited under State law.

The AG seeks Court Orders requiring both companies to forfeit illegal profits, pay restitution to harmed consumers, and pay fines equal to three times the profits generated through their illegal conduct.