Nevada Gaming Board Sues Coinbase Over Prediction Market Offerings

On Monday, February 2, 2026, the Nevada Gaming Control Board filed a civil enforcement action against Coinbase, seeking to halt the company from offering certain event contracts within the state. The Board announced its action on Tuesday, February 3, 2026, stating that the offering of sports event contracts and other similar contracts constitutes wagering activity requiring a license.

Regulatory Clash Over Prediction Markets

According to a press release from the Nevada Gaming Control Board, Coinbase’s operations are considered illegal in Nevada due to the lack of necessary gaming licenses. Mike Dreitzer, chairman of the Nevada Gaming Control Board, stated the Board “takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens.” He added that the action taken reinforces this obligation.

Did You Know? Coinbase announced in December that it would begin to allow access to prediction markets in the United States, with all market flow coming from Kalshi at launch.

Coinbase disputes the Board’s claims. Ryan VanGrack, vice president of litigation at Coinbase, characterized the move as a “state power grab” prohibited by Congress. VanGrack stated that Congress granted the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contracts.

Broader Regulatory Trend

This action by Nevada is part of a larger trend of states scrutinizing prediction markets. Several states, including Massachusetts, Tennessee, New York, New Jersey, Maryland, Arizona, and Illinois, have taken steps to regulate or ban these markets. On January 20, 2026, Massachusetts Attorney General Andrea Joy Campbell secured a preliminary injunction that may block Kalshi from including sports and related event contracts on its prediction market until it is licensed by the Massachusetts Gaming Commission.

Expert Insight: The increasing state-level intervention in prediction markets highlights a fundamental tension between state gaming regulations and the federal framework governing these new financial instruments. This conflict could lead to prolonged legal battles and uncertainty for companies operating in this space.

The Tennessee Sports Wagering Commission sent cease-and-desist letters to Polymarket, Kalshi, and Crypto.com on January 12, 2026, demanding they remove sports-related markets accessible to Tennessee customers. Coinbase has also proactively challenged state efforts to control prediction markets, filing lawsuits in Connecticut, Michigan, and Illinois in December.

Frequently Asked Questions

What is the Nevada Gaming Control Board seeking to do?

The Nevada Gaming Control Board is seeking to stop Coinbase from offering event contracts in the state, arguing that these contracts constitute unlicensed wagering activity.

How is Coinbase responding to the lawsuit?

Coinbase argues that the lawsuit is a “state power grab” prohibited by Congress, which granted the CFTC exclusive jurisdiction over event contracts.

Are other states also taking action against prediction markets?

Yes, several states, including Massachusetts, Tennessee, New York, New Jersey, Maryland, Arizona, and Illinois, have taken steps to regulate or ban prediction markets.

What impact will these regulatory challenges have on the future of prediction markets remains to be seen, but continued legal battles and a lack of consistent rules could hinder their growth and accessibility.