Nevada Judge Blocks Polymarket: Prediction Markets Face Legal Crackdown in State

A Nevada judge has issued a preliminary injunction blocking Polymarket from offering event contracts to residents, marking another victory for state regulators in their ongoing battle against prediction markets. The ruling, reported by The Las Vegas Review-Journal, follows similar legal actions taken against Kalshi and Coinbase, signaling a growing crackdown on platforms operating in a regulatory gray area.

The Nevada Gaming Control Board argues that event contracts constitute gambling and require state gaming licenses. However, platforms like Polymarket and Kalshi contend their operations fall under federal oversight by the Commodities and Futures Trading Commission (CFTC), treating their contracts as financial derivatives rather than gambling products.

First Judicial District Court Judge Jason Woodbury granted the injunction, with a formal written order expected to follow. In response, Mike Dreitzer, Chairman of the Nevada Gaming Control Board, expressed satisfaction with the ruling: ‘We are very pleased with Judge Woodbury’s ruling and will continue to vigorously enforce Nevada law to safeguard gaming in our state.’

The legal conflict highlights the unresolved tension between state gambling regulators and federal financial market oversight. While prediction markets argue federal regulations automatically shield them from state gambling laws, Nevada regulators insist these contracts are essentially sports betting, requiring licensing and oversight to protect public welfare.

This isn’t the first time Nevada has taken aggressive action against prediction markets. In March 2025, the state sent a cease-and-desist letter to Kalshi, accusing it of violating state gambling laws. Kalshi responded by suing Nevada in federal court, initially winning a temporary injunction from US District Judge Andrew Gordon. However, Gordon later dissolved the order, expressing skepticism about Kalshi’s legal argument that sports bets could be classified as commodities or swaps. In a blunt statement, Gordon wrote, ‘Nobody thought sports bets were commodities or excluded commodities or swaps until some brilliant people at Kalshi [did].’

The ongoing legal battles underscore the challenges prediction markets face as states like Nevada push to assert their authority over what they view as unregulated gambling activities.