Nevada regulator sues Coinbase over unlicensed event contracts
The Nevada Gaming Control Board (NGCB) has filed a civil enforcement action against Coinbase Financial Markets, Inc., asking a state court to stop the company from offering what it describes as unlicensed wagering products to users in Nevada.
In a complaint filed on Monday, 2 February, in the District Court for Carson City, the Board is seeking a declaration and injunction to halt Coinbase’s sale of certain “event contracts” through its mobile app. The regulator argues that these products fall within Nevada’s statutory definition of wagering and therefore require a state gaming licence.
According to the Board, Coinbase is a Commodity Futures Trading Commission-registered Futures Commission Merchant that acts as an intermediary for customers trading regulated derivatives listed on a third-party Designated Contract Market. However, the Board maintains that the nature of some of the products offered to Nevada residents places them squarely under state gaming law.
“The Board considers offering sports event contracts, or certain other event contracts, to constitute wagering activity under NRS 463.0193 and 463.01962 and, therefore, entities offering such event contracts must be licensed,” the regulator said in its press release.
The complaint alleges that Coinbase’s operations in Nevada are unlawful and in breach of multiple provisions of state law. By offering these contracts without approval, the Board argues that Coinbase is operating outside Nevada’s tightly controlled gaming framework.
Regulator cites public policy and consumer protection
In announcing the filing, the Board emphasised its statutory role in overseeing gaming activity in a state where gambling is a central part of the economy.
“The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens. The action taken yesterday reinforces this obligation,” Mike Dreitzer, NGCB Chairman, said.
The press release also restated Nevada’s long-standing public policy position on gambling, noting that the Legislature considers the gaming industry to be “vitally important to the economy of the state and the general welfare of the inhabitants.”
By seeking court-ordered relief, the Board is asking the judiciary to confirm that Coinbase’s event contracts amount to wagering under Nevada law and to prevent the company from continuing to make them available to users in the state without proper authorisation.
Legal action follows Polymarket ruling
The lawsuit against Coinbase comes just days after a Nevada state court issued a temporary restraining order against prediction market operator Polymarket, forcing it to suspend the offering of its event contracts to Nevada users ahead of Super Bowl LX.
That order was granted by the First Judicial District Court in Carson City and followed a civil enforcement action brought by the NGCB earlier in January. In that case, the court rejected arguments that federal commodities law gave the CFTC exclusive jurisdiction that would pre-empt Nevada’s gaming statutes at this stage of the proceedings.
State regulators have consistently argued that sports-related and real-world outcome contracts offered by prediction markets amount to gambling under Nevada law and therefore require a licence. The Polymarket decision has been widely viewed as strengthening the Board’s hand as it moves against other platforms operating in the state.
Gaming attorney Daniel Wallach highlighted the broader implications of the Coinbase filing in a LinkedIn post, noting that the case was brought in “the same court which just issued a temporary restraining order against Polymarket”. He added that the Board is seeking emergency relief to stop Coinbase from offering what it sees as unlicensed sports wagering and suggested that other platforms could soon face similar action.
Pressure builds on event-based trading platforms
Nevada’s action against Coinbase adds to a growing list of disputes across the United States over how event-based trading platforms should be regulated. Companies such as Polymarket and Kalshi have argued that their contracts are derivatives governed by federal commodities law, while state regulators have countered that sports and outcome-based contracts fall within existing gambling definitions.
Kalshi, in particular, has been involved in a series of legal battles with state authorities. Nevada previously issued a cease-and-desist order against the platform, claiming it was operating as an unlicensed sports pool. That dispute has moved back and forth through the courts, with mixed outcomes in different jurisdictions.
Expert view: Prediction markets are not sports betting
As regulators intensify scrutiny, industry experts argue that prediction markets and sports betting should not automatically be treated as the same activity.
In an interview with SiGMA News, Alice Li, Investment Partner at Foresight Ventures, said the distinction between the two is structural rather than semantic. While sports betting has historically been framed as entertainment, prediction markets are designed to turn real-world events into tradable contracts that aggregate information.
“Regulators should focus less on absolute volume and more on market quality indicators,” Li said. “Healthy markets show steady liquidity growth, price movements that track real-world information, and broad user participation across diverse contracts.”
Li also rejected the idea that prediction markets will simply converge into sports betting as sports-related contracts dominate volumes.
“There will be overlap, but they remain structurally different products,” she said. “Sports betting is primarily entertainment-driven. Prediction markets are information-driven, designed to aggregate collective intelligence and price real-world uncertainty.”
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