Nevada secures court order against Polymarket as prediction market fight grows

A Nevada state court has granted a preliminary injunction against prediction market operator Polymarket, marking the latest legal victory for state regulators seeking to restrict event-contract trading platforms.

First Judicial District Court Judge Jason Woodbury granted the Nevada Gaming Control Board‘s motion for a preliminary injunction on May 29, preventing QCX LLC, doing business as Polymarket, from offering its services in the state. A written order is expected to follow.

“We are very pleased with Judge Woodbury’s ruling and will continue to vigorously enforce Nevada law to safeguard gaming in our state,” Nevada Gaming Control Board Chairman Mike Dreitzer said.

The ruling makes Polymarket the third prediction market operator targeted by Nevada regulators, following similar actions against Kalshi and Coinbase. State regulators added they have now “successfully restricted the operation of all unlicensed prediction markets that had been known to be operating in Nevada.”

Nevada launched its enforcement campaign against prediction market operators after arguing that sports-event contracts and certain other event contracts constitute wagering activity under state law and therefore require gaming licenses.

Prediction market operators have disputed that position, contending that they are authorized to operate nationwide because they are regulated by the Commodity Futures Trading Commission (CFTC). They argue that federal commodities law grants the CFTC exclusive jurisdiction over event contracts and preempts state gaming regulations.

Nevada has pursued its challenges in state courts rather than federal courts and has secured favorable rulings. Courts have generally sided with the state, finding that event contracts likely qualify as gambling under Nevada law and that regulators are likely to prevail on the merits of their cases.

The legal battle, however, extends beyond Nevada. A consolidated federal appeal involving Kalshi, Robinhood and Crypto.com remains pending before the Ninth Circuit Court of Appeals. 

The case is expected to address whether the Commodity Exchange Act gives the CFTC exclusive authority over event contracts and whether federal law overrides state efforts to enforce gaming regulations against prediction market operators.

During oral arguments in April, Ninth Circuit judges appeared skeptical of claims that federal law completely bars states from regulating sports-event contracts. 

The panel questioned whether such contracts are effectively sports betting and why states would be prevented from enforcing their own gambling laws if the contracts fall within traditional state regulatory authority.

The outcome of the appeal could have implications for similar disputes across the United States.

Earlier this year, the Third Circuit Court of Appeals ruled in Kalshi’s favor in its dispute with New Jersey, providing support for the industry’s argument that federal commodities law preempts certain state gaming enforcement actions.

The Nevada ruling nonetheless strengthens the state’s position that sports-event contracts constitute gambling activity subject to state licensing requirements, setting up a broader legal clash over whether state regulators or federal commodities authorities have primary oversight of prediction markets.