The Nevada Gaming Control Board (NGCB) on Monday heralded its latest court win against a prediction market platform after receiving a favorable ruling from a federal judge in its legal dispute with Polymarket over sports event contracts.
The NGCB announced on June 1 that Judge Jason Woodbury of the First Judicial District Court for the State of Nevada granted the regulator’s motion for a preliminary injunction against Polymarket.
“We are very pleased with Judge Woodbury’s ruling and will continue to vigorously enforce Nevada law to safeguard gaming in our state,” said NGCB Chairman Mike Dreitzer.
The NGCB filed an initial lawsuit against Polymarket in January, bringing a civil enforcement action against the firm in a bid to prevent it from offering what the regulator considers “unlicensed wagering in violation of Nevada law.” The NGCB argues that Polymarket’s sports event contracts constitute gambling activity under state law, thereby allowing it to offer betting without a gaming license.
Nevada was one of the first states, along with Massachusetts, to take preemptive legal action against a prediction market for offering sports event contracts without a license.
Nevada vs. prediction markets
Woodbury granted the NGCB’s motion for a preliminary injunction based on previous legal proceedings concerning prediction markets and sports event contracts in Nevada.
Polymarket competitors Kalshi and Coinbase have also faced pushback in Nevada.
- A judge granted the NGCB’s preliminary injunction against Coinbase in March, requiring the company to temporarily pull its sports event contracts off the market. Coinbase received the unfavorable ruling despite arguing the CFTC’s exclusivity authority over prediction markets through the Commodity Exchange Act.
- Kalshi was also ordered to stop delivering sports event contracts in Nevada after being initially granted a temporary restraining order to keep its offerings online.
- Kalshi’s TRO was dissolved after Crypto.com was denied a similar motion in Nevada, and a Maryland judge denied an injunction request from Kalshi.
“The Board has taken decisive action in recent months to halt the operations of other prediction markets in the state and has successfully restricted the operation of all unlicensed prediction markets that had been known to be operating in Nevada,” said Nevada’s gaming regulator in a press release. “Because of previously entered preliminary injunction orders, Kalshi and Coinbase are prohibited from offering or facilitating sports-, election-, and entertainment-related event contracts in the state of Nevada.
Polymarket offers nationwide access to US exchange
The NGCB filed a suit against Polymarket before the company expanded its reach in the U.S. last month by closing its waitlist and allowing iOS users to access its U.S. exchange.
Polymarket exited the American market in 2022, after agreeing to settle a dispute with the Commodity Futures Trading Commission (CFTC). It paid a $1.4m monetary penalty to the CFTC in January 2022 for failing to register as a designated contract market and as a swap execution facility with the agency.
The company found its way back to the U.S. prediction market sector by acquiring CFTC-registered derivatives exchange QXC and its affiliated clearinghouse for $112m. QXC is registered as a DCM, while the clearinghouse is a derivatives clearing organization.
