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By Jonathan Stempel<\/p>\n
NEW YORK, April 24 (Reuters) – The U.S. Commodity Futures Trading Commission sued New York on Friday, accusing \u200cthe state of invading its authority to regulate prediction markets \u200cby filing lawsuits accusing Coinbase Financial Markets and Gemini Titan of promoting gambling.<\/p>\n
In \u200ba complaint filed in Manhattan federal court, the CFTC said the litigation filed on April 24 by New York Attorney General Letitia James “intrudes on the exclusive federal scheme Congress designed” to oversee commodity derivatives markets, \u200cincluding prediction markets.<\/p>\n
The CFTC \u2060filed similar lawsuits on April 2 against Arizona, Connecticut and Illinois.<\/p>\n
James’ office had no immediate comment.<\/p>\n
Prediction markets \u2060let people wager on the outcome of events such as sports and elections, through so-called event contracts.<\/p>\n
They have surged in popularity since their \u200breal-time probabilities \u200bproved more accurate than polling in \u200bpredicting Donald Trump’s victory in \u200cthe 2024 U.S. presidential election.<\/p>\n
James alleged that Coinbase and Gemini should have obtained New York State Gaming Commission licenses to operate their prediction markets in the state.<\/p>\n
She called the Manhattan-based companies’ event contracts “quintessentially gambling” because event outcomes are outside bettors’ control or amount to \u200cgames of chance.<\/p>\n
James also objected to \u200bCoinbase and Gemini opening their platforms to \u200b18-to-20-year-olds, despite a state \u200blaw setting a minimum age of 21 for mobile \u200csports betting.<\/p>\n
Gemini’s parent, Gemini Space \u200bStation, is led \u200bby billionaire twins Tyler Winklevoss and Cameron Winklevoss, who are respectively chief executive and president.<\/p>\n
Another operator of prediction markets, Kalshi, sued \u200bNew York’s gaming \u200ccommission in October to preemptively block any ban on event \u200bcontracts. That case remains pending.<\/p>\n
(Reporting by Jonathan Stempel in \u200bNew York; Editing by Matthew Lewis)<\/p>\n<\/p><\/div>\n