Nevada Regulator Sues Coinbase Over Unlicensed Event Contracts

The Nevada Gaming Control Board launched a civil enforcement action targeting Coinbase Financial Markets, Inc.  This filing asks a Nevada court to stop offerings described as unlicensed wagering products.

On 2 February, the Board submitted the complaint in Carson City District Court. The request includes a declaration and injunction against event contracts sold through the app. The Board argues these products meet Nevada’s legal definition of wagering. State law, therefore, requires a gaming licence for such activity. The regulator confirmed that  Coinbase holds registration as a Futures Commission Merchant with the Commodity Futures Trading Commission. Coinbase facilitates customer trades in regulated derivatives on a Designated Contract Market. However, the Board says some products offered to Nevada users fall under gaming statutes. Offering sports event contracts qualifies as wagering under NRS 463.0193 and 463.01962. Entities providing these contracts must secure state licensing. The complaint states that Coinbase violates multiple Nevada gaming provisions. The Board claims these actions bypass the state’s regulated gaming framework.

Regulator Cites Public Policy and Consumer Protection

While announcing the filing, the Board highlighted its statutory role overseeing gaming activity in Nevada. The regulator noted that gambling remains a central part of the state economy. NGCB Chairman Mike Dreitzer said the Board takes its duty to protect Nevada citizens seriously. He added that the action taken yesterday reinforces obligations tied to a thriving gaming industry. The release also restated Nevada legislative policy on gambling and economic welfare. Lawmakers consider gaming vitally important to the economy and the general welfare of inhabitants. By seeking court relief, the Board asks judges to confirm that event contracts qualify as wagering. It also seeks to stop availability to Nevada users without proper authorisation. 

Legal Action Follows Polymarket Ruling

The lawsuit follows a recent Nevada court order against prediction market operator Polymarket. That order forced the suspension of event contracts offered to Nevada users before Super Bowl LX. The First Judicial District Court in Carson City granted the temporary restraining order. NGCB brought that civil enforcement action earlier in January. During proceedings, the court rejected claims of exclusive federal commodities jurisdiction at this stage. State regulators argue sports-related outcome contracts amount to gambling under Nevada law. The Polymarket decision strengthened the Board’s position against other platforms. This ruling supports further enforcement actions within the state.

Pressure Builds on Event-Based Trading Platforms

Nevada’s action adds pressure across the United States over event-based trading regulation. Platforms like Polymarket and Kalshi argue that contracts qualify as federal commodities derivatives. State regulators counter that outcome-based contracts fall within gambling definitions. Kalshi has faced several legal disputes with state authorities. Nevada previously issued a cease-and-desist order alleging unlicensed sports pool operations. That dispute has moved through courts with mixed outcomes across jurisdictions.

Expert View: Prediction Markets Are Not Sports Betting

As scrutiny increases, industry experts dispute equating prediction markets with sports betting. Speaking with SiGMA News, Alice Li explained the distinction remains structural. Li serves as Investment Partner at Foresight Ventures. She said sports betting historically serves entertainment purposes. Prediction markets convert real-world events into tradable contracts aggregating information. Li urged regulators to focus on market quality rather than absolute volume. She cited liquidity growth, price tracking, and broad participation as indicators. Li rejected claims that prediction markets will become sports betting. She said overlap exists but products remain structurally different. Li stated sports betting follows entertainment demand. Prediction markets focus on information aggregation and pricing uncertainty.