New York Attorney General Letitia James filed a lawsuit against both coinbase (NASDAQ:COIN) And Gemini (NASDAQ:SHIP) alleges that illegal gambling platforms are operated.
The NY AG noted that both platforms enable prediction markets that allow users to bet on events such as sports and elections. The announcement stated that neither platform has received a gambling license from the New York State Gaming Commission.
It is also stated that these platforms expose young New Yorkers (under the age of 21) to financial risk.
The lawsuit follows other states taking similar legal action, claiming the states have oversight over the gaming industry. Meanwhile, the Commodity Futures Trading Commission (CFTC) is opposing these state initiatives to challenge federal authority in the courts.
An investigation found the two platforms operated prediction markets that “constituted illegal, unlicensed gambling operations,” according to the AG’s office.
AG James made the following statement:
“Gambling by any other name is still gambling and is not exempt from regulations under our state laws and our Constitution. Gemini and Coinbase’s so-called prediction markets are merely illegal gambling operations that expose young people to addictive platforms that lack necessary guardrails. My office is taking action to protect New Yorkers and stop these platforms from violating the law.”
Earlier this month, CFTC Chairman Michael S. Selig the agency said to want “Continue to maintain exclusive regulatory authority over these markets and protect market participants from overzealous government regulators.” TCFTC coming soon announced a legal victory in the appeals court.
Generally, the federal government has preemptive authority over state regulations. At the same time, the gaming industry does not like competition from fledgling prediction markets. Additionally, there is a political element here as the Trump Administration supports Fintech innovation and the NY AG is a notable opponent of the Trump Administration. AG James ran to his office, declare Intent to undermine the Trump presidency.
