Nevada has achieved significant legal victories against various prediction market operators, including Polymarket, Kalshi, Coinbase, Robinhood, and Crypto.com.
On Monday, the Nevada Gaming Control Board (NGCB) announced that a state court has granted its request for a preliminary injunction against Polymarket. This ruling represents the latest success for Nevada in its ongoing battle with prediction market entities.
According to a press release from the NGCB, Judge Woodbury of Nevada’s First Judicial District Court approved the motion on May 29, with a written order expected to follow shortly.
NGCB Chairman Mike Dreitzer expressed satisfaction with the ruling, stating, “We are very pleased with Judge Woodbury’s decision and will continue to rigorously enforce Nevada law to protect gaming in our state.”
The NGCB highlighted its recent actions against multiple prediction market operators, noting that it has effectively curtailed the operations of all unlicensed prediction markets known to be functioning within Nevada.
In addition to the Polymarket ruling, the NGCB had previously obtained preliminary injunctions against Kalshi in April and Coinbase in March. Furthermore, both Crypto.com and Robinhood have agreed to cease offering sports event contracts in Nevada by the end of 2025, following the courts' rejection of their motions for preliminary injunctions against the regulator.
The NGCB argues that sports event contracts and certain other event contracts are classified as wagering activities under state law, necessitating licenses for their operation.
State courts have consistently sided with the NGCB in these matters, affirming that event contracts qualify as gambling under Nevada law and indicating that the regulator is likely to prevail in its arguments.
Meanwhile, a separate federal appeal involving Kalshi, Robinhood, and Crypto.com is still pending before the Ninth Circuit. This case questions whether the Commodity Exchange Act grants the CFTC exclusive authority over event contracts traded on prediction markets and whether this federal law supersedes Nevada’s enforcement of its gaming regulations.
During oral arguments in April, a panel from the Ninth Circuit expressed skepticism regarding the companies' claims that federal law completely prohibits state enforcement. They probed into whether sports-event contracts effectively represent sports betting and questioned the rationale behind preventing states from enforcing their gambling laws if such contracts fall within traditional state regulatory jurisdiction.
A ruling from the Ninth Circuit could have broader implications beyond Nevada. Earlier this year, the Third Circuit ruled in favor of Kalshi in its dispute with New Jersey. If the Ninth Circuit supports Nevada's stance, it may bolster other states' challenges against prediction market operators nationwide. Conversely, a ruling in favor of the companies could lend credence to their argument that federal commodities law preempts state gaming enforcement.