Nevada court denies state’s bid to halt Coinbase prediction markets
A Nevada state judge has rejected an emergency request from regulators to immediately shut down Coinbase’s newly launched prediction markets. The ruling comes as a tactical win for the exchange, which argues that its event contracts fall under federal protection rather than state gambling laws.
The legal tug-of-war over the classification of prediction markets has taken a sharp turn in favor of the industry’s largest US player.
A Nevada state court has denied a request from the Nevada Gaming Control Board (NGCB) for a temporary restraining order (TRO) that would have forced Coinbase to immediately suspend its prediction market offerings in the state. The NGCB had filed a civil enforcement action earlier this week, alleging that Coinbase was operating an unlicensed sports betting and gambling business. However, the presiding judge ruled that the state failed to demonstrate “immediate and irreparable harm,” particularly since Coinbase’s partner, Kalshi, already offers similar CFTC-regulated products to Nevada residents.
The defense from Coinbase centered on federal preemption. Chief Legal Officer Paul Grewal argued that because the contracts are listed on a platform regulated by the Commodity Futures Trading Commission (CFTC), they fall under the exclusive jurisdiction of federal law, not the patchwork of 50 different state gaming codes.
On the data side, the legal offensive is part of a broader strategy to secure regulatory clarity. While Nevada is the latest battlefield, Coinbase sues three states over prediction markets regulation specifically Michigan, Illinois, and Connecticut seeking a federal declaration that state regulators cannot interfere with products approved by the CFTC. The exchange maintains that prediction markets are neutral matching engines for risk management, distinct from traditional sportsbooks that profit from customer losses.
The timing of the Nevada ruling is particularly significant as the industry faces increased scrutiny following the explosive growth of platforms like Polymarket and Kalshi. Nevada authorities have already successfully issued a 14-day TRO against Polymarket, but the court’s refusal to apply the same standard to Coinbase suggests that the exchange’s regulated infrastructure may offer a stronger legal shield.
Recent court filings show that Coinbase has now moved the fight to federal court in Nevada, seeking to block state enforcement entirely. The company contends that the Commodity Exchange Act grants the CFTC “exclusive jurisdiction” over swaps and event contracts, a position that, if upheld, could strip state gaming boards of their power to regulate these digital asset markets.
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