Court Orders Polymarket Out of Nevada

A Nevada judge granted a preliminary injunction preventing Polymarket from offering its services in the state while litigation continues. State regulators argue that event-based contracts offered by prediction markets fall under Nevada’s gaming laws and require proper licensing. The ruling adds to the growing legal debate over whether prediction markets should be regulated by states or federal authorities. This case is part of a larger national debate over whether prediction-market platforms are regulated financial products overseen by the U.S. Commodity Futures Trading Commission (CFTC) or whether states can regulate them as gambling activities. Nevada regulators have emphasized concerns related to consumer protections, licensing requirements, and compliance standards that apply to legal wagering operators in the state.

Nevada Court Grants Preliminary Injunction Against Polymarket

Judge Jason Woodbury of Nevada’s First Judicial District Court granted the preliminary injunction on May 29, marking the state’s continued success in courtroom battles against prediction market operators. The ruling followed an initial 14-day temporary restraining order issued in late January that prevented Polymarket from offering event-based contracts during the Super Bowl period.

NGCB Chairman Mike Dreitzer expressed satisfaction with the outcome. “We are very pleased with Judge Woodbury’s ruling and will continue to vigorously enforce Nevada law to safeguard gaming in our state,” Dreitzer stated. The judge rejected Polymarket operator Blockratize’s argument that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over its event contracts.

Nevada secured similar preliminary injunctions against Kalshi in April and Coinbase in March. Meanwhile, Crypto.com and Robinhood agreed to stop offering sports event contracts in the state in late 2025 after courts rejected their motions for preliminary injunctions against the regulator.

In response to the order, Polymarket suspended access to Nevada users. The court found that the platform’s continued operation without a gaming license posed immediate and irreparable harm to the state’s ability to police betting integrity, underage gambling, and suitability standards.

State Regulators Challenge Prediction Markets Under Gaming Laws

Nevada regulators base their case on the state’s broad definition of gambling games, which encompasses any game played with equipment for money or property. State authorities contend Kalshi and similar platforms fall under Nevada jurisdiction when accepting bets from state residents, despite the companies’ claims that federal oversight by the CFTC exempts them from state regulations.

The Nevada Council on Problem Gambling joined the legal fight through amicus briefs, arguing that prediction markets replicate gambling behavior without corresponding safeguards. “If it behaves like gambling, it should carry the same guardrails, accountability, and public health obligations,” stated NCPG Executive Director Trey Delap. The organization noted that nearly half of digital sports betting advertisements viewed in the U.S. come from prediction platforms not subject to responsible gambling advertising requirements.

Nevada’s gaming framework requires operators to implement age verification, self-exclusion programs, deposit limits, and problem gambling program funding. Unlike licensed casinos where gambling risks are explicit, Kalshi downplays warnings related to addiction and financial harm, according to NCPG filings. The council warned that without these protections, prediction market use in Nevada represents “a public health crisis waiting to happen”.

Eleven states have issued cease-and-desist orders against prediction market operators, while 38 states have indicated they should retain authority to regulate these platforms under state gambling laws.

Ruling Escalates Federal-State Jurisdiction Debate

CFTC Chairman Michael Selig filed amicus briefs asserting that platforms registered as designated contract markets fall under the commission’s sole regulatory jurisdiction. “This power grab ignores the law and decades of precedent,” Selig stated in court filings challenging Nevada’s enforcement efforts. The federal regulator has filed simultaneous complaints for declaratory relief in Illinois, Connecticut, and Arizona during early 2026, representing a significant escalation in defending CFTC exclusive jurisdiction.

However, former CFTC and SEC Chairman Gary Gensler disputed the agency’s claimed authority. Gensler told CNBC that the commission lacks authorization under the 2010 Dodd-Frank Act to regulate prediction markets. He predicted the dispute will reach the Supreme Court for final resolution.

The Third Circuit ruled on April 6, 2026, that the Commodity Exchange Act preempts New Jersey’s gambling laws for Kalshi’s sports contracts. The court held that allowing state enforcement would recreate the regulatory patchwork Congress sought to eliminate by creating the CFTC.

Arizona filed criminal charges against KalshiEX LLC on March 17, 2026, marking the most serious state action to date. A coalition of 34 states plus the District of Columbia and Northern Mariana Islands filed amicus briefs supporting state authority.

Legal experts anticipate Supreme Court intervention to resolve the conflict between federal commodities regulation and state gambling oversight.