Nevada court blocks Coinbase prediction markets, challenges federal oversight claims

A Nevada state court has granted a preliminary injunction against Coinbase, barring the company from offering event-based prediction contracts in the state, in a ruling that underscores growing legal tensions over the regulation of such platforms in the United States.

The decision, issued by the First Judicial District Court of the State of Nevada on 26 March, follows a temporary restraining order granted in February and reflects the court’s view that Nevada is likely to succeed in its case.

The dispute centres on Coinbase’s partnership with Kalshi, a regulated exchange that allows users to trade contracts tied to real-world outcomes, ranging from sports to elections. The collaboration marked Coinbase’s expansion beyond cryptocurrency trading into the fast-growing prediction markets sector.

The court rejected a key argument advanced by prediction market operators that the Commodity Exchange Act grants exclusive regulatory authority to the Commodity Futures Trading Commission.

Instead, it said that “based on the current state of the law,” the statute, “fairly interpreted does not vest exclusive jurisdiction over event contracts traded through Coinbase’s platforms with the Commodity Futures Trading Commission.”

Legal expert Daniel Wallach said in a LinkedIn post: “Nevada state court judge issues preliminary injunction barring Coinbase from offering sports-, election-, and entertainment-related event contracts in Nevada, holds that CEA does not preempt Nevada’s gambling laws.”

Wallach added that Coinbase would be required to adjust its operations to comply with the ruling. “Coinbase will be given 60 days to make ‘technological enhancements’ necessary to comply with the terms of the order. In the interim period, Coinbase will screen based on ‘residency.’ This will likely help Kalshi avoid contempt for not complying with its own TRO.”

The injunction comes days after Nevada secured a similar legal victory against Kalshi itself. On 20 March, a court granted a temporary restraining order preventing the exchange from conducting business in the state, signalling a coordinated push by regulators against prediction market platforms operating without state licences.

Nevada’s actions form part of a broader national trend, with more than a dozen U.S. states engaged in legal disputes over prediction markets, which allow users to trade contracts linked to real-world events. State authorities argue such offerings resemble gambling and should fall under local gaming laws, while operators maintain they are financial instruments governed by federal regulation.

Courts have been divided on the issue. While rulings in Nevada and Massachusetts have favoured state oversight, a court in Tennessee granted Kalshi a preliminary injunction blocking the state from enforcing its gambling laws against the platform.

The sector has grown rapidly in recent years. According to a report from market intelligence provider Blask, prediction markets recorded a 256% increase in their performance index in 2025, with early momentum driven by the 2024 U.S. presidential election and further expansion fuelled by the addition of sports-based contracts.

With conflicting decisions emerging across jurisdictions, legal experts say the question of whether federal law preempts state gambling regulations in prediction markets could ultimately be decided by the U.S. Supreme Court.