Nevada Judge Orders Polymarket to Halt Operations in the State
Why Did Nevada Step In?
A Nevada state judge has ordered onchain prediction market Polymarket to temporarily stop offering event-based contracts to residents of the state, dealing a fresh blow to the industry’s argument that federal commodities law overrides state gambling rules.
In a Thursday order, the court granted the Nevada Gaming Control Board a 14-day temporary restraining order against Polymarket operator Blockratize. The ruling prevents the platform from offering sports and other event-linked contracts in Nevada while the case proceeds. A hearing on whether to extend the restriction through a preliminary injunction is scheduled for Feb. 11.
At this ahead stage, the court sided with state regulators, finding that Polymarket’s contracts resemble unlicensed wagering under Nevada law rather than regulated financial instruments. That conclusion cuts directly against a central industry claim that prediction markets fall solely under federal oversight when structured as derivatives.
Investor Takeaway
How the Court Framed the Risk
The judge cited “immediate” and “irreparable” harm to Nevada’s regulatory framework if Polymarket continued operating without a gaming license. The order highlighted concerns tied to betting integrity, underage access, and suitability standards—areas traditionally overviewn by state gaming authorities.
By focusing on those consumer protection issues, the ruling framed prediction markets less as neutral forecasting tools and more as products that trigger long-standing gambling secureguards. That framing matters because it gives states a clear rationale to intervene even when platforms argue that federal law should apply.
The court also rejected Blockratize’s claim that the Commodity platform Act grants the US Commodity Futures Trading Commission exclusive authority over its event contracts. Instead, the judge concluded that Nevada may still enforce its own gambling statutes while the broader legal question is litigated.
Polymarket had not publicly responded at the time of publication, but the order adds to a growing list of state-level actions that challenge the industry’s reliance on federal preemption arguments.
Nevada Joins a Wider State Crackdown
Nevada’s move follows a similar action taken last month in Tennesview. The state’s Sports Wagering Council ordered Kalshi, Polymarket, and Crypto.com’s North American Derivatives platform to stop offering sports-related event contracts to residents. Regulators there also directed platforms to void existing trades and issue refunds.
Tennesview officials argued that the contracts amounted to sports betting and therefore required state authorization. Their enforcement order focused heavily on consumer protection gaps, including age verification and responsible gaming controls, areas where prediction markets have often relied on lighter-touch compliance models.
Together, the Nevada and Tennesview cases suggest a shared view among state regulators: when event contracts track sporting outcomes or resemble traditional wagers, they fall squarely within state gambling law, regardless of how they are labeled.
Investor Takeaway
Where Federal and State Law Collide
The Nevada ruling lands amid an ongoing legal clash over who ultimately regulates prediction markets in the United States. Kalshi, which operates as a CFTC-designated contract market, has spent much of the past year defending its products against both state and federal challenges.
Outcomes have varied. Kalshi secured temporary relief in some states, including Connecticut and New Jersey, while facing setbacks or dissolved protections in others such as Nevada and Maryland. The mixed record has left the industry without a clear nationwide rulebook.
That uncertainty has pushed the issue into federal courts. In December, Coinbase filed lawsuits in Connecticut, Illinois, and Michigan, asking judges to declare that prediction markets listed on a CFTC-regulated venue fall under federal commodities law rather than separate state gambling codes. Those cases aim to settle the preemption question directly, but reanswer is likely to take time.
Until then, state regulators retain practical leverage. Temporary restraining orders and injunctions can restrict access rapidly, even before courts reach final conclusions on jurisdiction.
What Comes Next for Prediction Markets
The immediate next step in Nevada will be the Feb. 11 hearing, where the court will decide whether to convert the temporary order into a longer-lasting injunction. A broader ruling on the merits could take months, but the interim impact is already clear: Polymarket cannot operate in the state for now.
If similar actions spread, prediction markets may be forced to narrow product offerings, restrict geographic access, or pursue clearer licensing paths at the state level. Each option carries trade-offs for liquidity, growth, and compliance costs.
Nevada’s order does not settle the national debate, but it adds weight to a trend that is hard to ignore. As long as courts continue to side with states at the ahead stages of litigation, prediction markets will face ongoing uncertainty about where—and how—they can legally operate in the US.
