A Nevada state court judge has issued a preliminary injunction against Coinbase, preventing the platform from offering event-based prediction contracts within the state.

The ruling, handed down by the First Judicial District Court of the State of Nevada on 26 March, follows an earlier temporary restraining order (TRO) granted in February. The court concluded that Nevada is likely to succeed in its case, effectively halting Coinbase’s prediction markets operations in the jurisdiction while litigation continues.

The case centres on Coinbase’s partnership with Kalshi, a regulated exchange that facilitates trading on event outcomes ranging from sports to elections. The collaboration marked Coinbase’s expansion beyond cryptocurrency trading into the fast-emerging prediction markets sector.

Legal expert Daniel Wallach highlighted the significance of the ruling in a LinkedIn post. “Nevada state court judge issues preliminary injunction barring Coinbase from offering sports-, election-, and entertainment-related event contracts in Nevada, holds that CEA does not preempt Nevada’s gambling laws,” he said.

The decision challenges a central argument made by prediction market operators that the Commodity Exchange Act grants the Commodity Futures Trading Commission (CFTC) exclusive regulatory authority on the platforms.

However, the Nevada court rejected this interpretation, stating that, “based on the current state of the law,” the Commodity Exchange Act does not provide the CFTC with exclusive jurisdiction over such event contracts. This position aligns with several recent rulings favouring state-level oversight.

Wallach further noted operational implications for Coinbase following the order. “Coinbase will be given 60 days to make ‘technological enhancements’ necessary to comply with the terms of the order. In the interim period, Coinbase will screen based on ‘residency.’ This will likely help Kalshi avoid contempt for not complying with its own TRO.”

The injunction against Coinbase comes just days after Nevada secured a similar legal victory against Kalshi itself. On 20 March, the court granted a TRO preventing Kalshi from conducting business in the state, signalling a coordinated regulatory push against prediction market platforms operating without state licences.
 

Growing legal divide over prediction markets

Nevada’s actions are part of a broader national trend, with more than a dozen U.S. states currently engaged in legal disputes over prediction markets. These platforms, which allow users to trade contracts tied to real-world outcomes, have surged in popularity but remain largely unregulated at the state level.

States argue that such products resemble gambling and should therefore fall under local gaming laws. Operators, by contrast, insist their offerings are financial instruments governed by federal law.

While Nevada and Massachusetts courts have sided with state regulators, other jurisdictions have taken a different approach. In Tennessee, for example, a court granted Kalshi a preliminary injunction blocking the state from enforcing its gambling laws against the platform.
 

Prediction markets’ rapid rise in demand in US

Prediction markets have emerged as one of the fastest-growing verticals in the broader online trading and gaming ecosystem in the U.S. According to the latest report from market intelligence provider Blask, the sector recorded a 256 percent increase in its performance index throughout 2025.

The Blask report said that while early momentum was largely driven by the 2024 U.S. presidential election cycle, analysts note that expansion into sports markets has triggered a fresh phase of growth.

 

 

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