Nevada files lawsuit to block Coinbase’s prediction markets

Nevada regulators have launched a high-stakes legal challenge against Coinbase, accusing the crypto exchange of running unlicensed sports wagering through its prediction markets — a move that intensifies the growing showdown between state gaming authorities and federally regulated event-contract platforms.

The Nevada Gaming Control Board (NGCB) on Monday filed a civil enforcement action against Coinbase Financial Markets in the First Judicial District Court in Carson City, alleging the company unlawfully offered wagers on sporting events without a state gaming license.

Regulators are seeking an ex parte temporary restraining order, along with a preliminary and permanent injunction, to immediately halt Coinbase from operating what Nevada describes as a derivatives exchange and prediction market tied to sports and election outcomes within the state.

In his statement, NGCB chair Mike Dreitzer said

“The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens, The action taken yesterday reinforces this obligation.”

State says event contracts equal gambling under Nevada law

At the heart of the dispute is Nevada’s position that event-based contracts on sports and elections constitute wagering, regardless of how the products are labeled or federally supervised.

According to the complaint, Nevada law requires any entity offering such products to obtain a state gaming license, comply with consumer-protection rules, and enforce the state’s 21-and-over age requirement for gambling. Regulators allege Coinbase’s platform allows users as young as 18 to trade event contracts, placing it in direct violation of state law.

The NGCB also warned that Coinbase’s model creates an “unfair competitive advantage” over licensed sportsbooks, which must pay taxes, maintain physical operations, and adhere to strict compliance standards.

The enforcement action comes less than a week after Coinbase announced it had rolled out prediction markets nationwide across all 50 U.S. states, following a partnership with Kalshi, a Commodity Futures Trading Commission (CFTC)-regulated designated contract market.

Coinbase has argued that Kalshi’s federal registration places prediction markets squarely under CFTC jurisdiction, insulating them from state-level gambling enforcement. Nevada regulators strongly disagree, asserting that state gaming laws still apply when contracts resemble traditional sports betting.

Coinbase is the latest platform caught in Nevada’s widening enforcement net. Just days earlier, a Nevada court granted a temporary restraining order against Polymarket, blocking the platform from offering event-based contracts to state residents.

In that case, the judge cited the risk of “immediate and irreparable harm” to Nevada’s ability to regulate gambling if unlicensed prediction markets were allowed to operate unchecked.

Nevada has also been locked in a long-running legal dispute with Kalshi, which began with a cease-and-desist order last year and is now being appealed in the Ninth Circuit.

A broader fight over who controls prediction markets

The Coinbase lawsuit underscores a rapidly escalating jurisdictional battle over prediction markets, with implications far beyond Nevada.

While Coinbase has filed federal lawsuits against regulators in Connecticut, Michigan, and Illinois, arguing that the CFTC holds exclusive authority over event contracts, Nevada and other gaming states maintain that sports-linked contracts fall squarely within state gambling law.

With no comprehensive federal framework governing prediction markets, analysts expect more state-level crackdowns as crypto exchanges and financial platforms push deeper into event-based trading.

For now, Nevada is positioning itself at the front lines of that fight — challenging whether prediction markets are innovative financial instruments, or simply sports betting by another name.