Key Highlights
- Nevada seeks to halt Coinbase’s sports event contracts over alleged unlicensed wagering.
- The case has deepened the federal vs. state divide on who regulates prediction markets.
- Rulings may set precedent for future sports-linked crypto derivatives in the U.S.
The Nevada Gaming Control Board (NGCB) has filed a civil enforcement action against Coinbase Financial Markets, Inc., accusing the crypto exchange of offering unlicensed wagering through sports-related event contracts.
The lawsuit was filed on February 2, 2026, in the First Judicial District Court of Nevada in and for Carson City. Regulators are seeking a court declaration and injunction to halt Coinbase’s alleged unlawful activities in the state.
In its filing, the NGCB requested a temporary restraining order and a preliminary injunction that would prevent Coinbase from “operating a derivatives exchange and prediction market” tied to sporting events for Nevada residents.
The Board argues that these contracts, which allow users to trade on the outcome of sporting events, are not mere “financial derivatives,” but rather qualify as wagering activity under Nevada Revised Statutes. Therefore, it stated, “entities offering such event contracts must be licensed.”
Regulators question Coinbase’s legal standing
The U.S. Commodity Futures Trading Commission (CFTC) has registered Coinbase Financial Markets at the federal level. However, Nevada regulators argue that federal registration does not override state gaming laws when products resemble sports betting.
“The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens,” said NGCB Chairman Mike Dreitzer in a statement. “The action taken yesterday reinforces this obligation.”
The enforcement action comes less than a week after Coinbase announced the nationwide rollout of prediction markets across all 50 U.S. states through a partnership with federally regulated platform Kalshi.
Predictions markets face legal scrutiny
Coinbase is not alone in facing scrutiny from Nevada regulators. Last week, a Nevada court granted a temporary restraining order against a Polymarket operator, blocking the platform from offering event-based contracts to state residents.
In that case, the judge cited “immediate” and “irreparable” harm to the state’s ability to regulate betting activity conducted without a license.
Additionally, while Kalshi operates under CFTC oversight, Nevada authorities maintain that state-level regulators retain jurisdiction over wagering activities conducted within state borders, including sports-related contracts.
The legal actions against Coinbase and Polymarket highlight growing tensions between state gaming authorities and federal regulators over jurisdictional authority in prediction markets. As states keep questioning platforms that are overseen by the CFTC, the results of these cases could influence the future of prediction markets and determine if federal derivatives rules can override state gaming laws without clear laws saying so.
Robinhood Derivatives case highlights federal-state divide
Last year, Robinhood Derivatives LLC sued gaming regulators in Nevada and New Jersey after launching sports-related event contracts without state approval. The company argued that state attempts to block the products conflicted with federal law, as the contracts were offered through a CFTC-regulated framework linked to Kalishi’s approved exchange.
Robinhood warned it faced immediate civil penalties and potential criminal exposure despite operating under federal oversight. The case exposed a widening split, with some courts favoring federal authority over derivatives markets while others upheld state gaming enforcement.
The outcome of these disputes could play a key role in shaping the future of sports-lined prediction markets in the U.S.
Also Read: DOJ Emails Reveal Jeffrey Epstein Invested $3M in Coinbase in 2014
