Overview
Coinbase launched a prediction‑market product for U.S. customers through a partnership with Kalshi, a CFTC‑registered designated contract market. Nevada’s Gaming Control Board responded by filing a complaint and a request for an ex parte temporary restraining order in the District Court for Carson City.
Legal Background
The Board argues that offering sports‑event contracts or other event contracts constitutes wagering under Nevada Revised Statutes 463.0193 and 463.01962. Consequently, any entity offering such contracts must hold a state gaming license.
Nevada law sets a minimum gambling age of 21, yet Coinbase allows users 18 and older to open accounts and trade event contracts, prompting the Board’s request for an immediate halt.
Coinbase’s Position
Coinbase maintains that prediction markets fall under federal jurisdiction, a stance it has taken in lawsuits against three states. The company contends that its offerings are not gambling but regulated financial contracts.
Recent Enforcement Actions
- March 2023 – Nevada Gaming Control Board issued a cease‑and‑desist order to Kalshi over sports‑event contracts.
- November 2023 – A brief injunction in Kalshi’s favor was lifted; Kalshi is now appealing to the Ninth Circuit.
- Early 2024 – Polymarket received a temporary restraining order blocking event contracts to Nevada residents for two weeks.
- April 2024 – Nevada filed a complaint and TRO request against Coinbase’s prediction‑market product.
Implications for Prediction‑Market Platforms
The Nevada action highlights the growing tension between state gaming regulators and platforms that classify event‑based contracts as financial instruments. Multiple amicus briefs from states and tribal organizations support Nevada, while Kalshi has received limited amicus support.
Future outcomes will likely shape how prediction‑market products operate across the United States, balancing federal oversight with state gambling laws.