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Gaming Edge’s TL;DR
- Nevada secured a preliminary injunction blocking Coinbase from offering event prediction contracts in the state.
- This follows a separate temporary restraining order against Kalshi and keeps Nevada at the center of a growing legal battle over whether state gambling laws or the federal Commodity Exchange Act govern prediction markets.
The First Judicial District Court of Nevada granted a preliminary injunction on March 26, finding the state likely to prevail in its case that Coinbase’s prediction market activity violates Nevada law.
The decision follows a February temporary restraining order and comes a week after Nevada won a TRO against Kalshi, the prediction market operator that partnered with Coinbase. Coinbase had recently expanded into event contracts – ranging from sports to geopolitical outcomes – via that partnership.
Operators of prediction markets argue regulation belongs exclusively to the Commodity Futures Trading Commission under the Commodity Exchange Act (CEA). Nevada’s court disagreed, saying that “based on the current state of the law” the CEA does not clearly pre-empt state authority over these contracts. The ruling deepens legal fragmentation as more than a dozen states pursue enforcement actions and injunctions.
Issue may end with uniform US ruling
The immediate effect is practical. Residents of Nevada will be blocked from using Coinbase’s prediction contracts, and similar state rulings can force geoblocking or service suspension elsewhere.
Liquidity and market depth for event contracts can suffer when major providers pause operations, which can widen spreads and reduce available betting options. Operators face rising compliance costs, litigation risk, and market fragmentation – forcing choices to either litigate, restrict state access, or seek state licensing where possible.
Crypto platforms that bundle prediction markets with trading products also risk regulatory scrutiny beyond state courts, potentially affecting onboarding, KYC, and payment flows.
Expect appeals and more courtroom battles – some cases have already split in different jurisdictions – and the issue may ultimately reach higher federal courts for a uniform ruling.
Based on reporting by Amy Calistri for Yahoo Finance.
