A Nevada state court has barred Coinbase from offering event-based prediction contracts within its jurisdiction, intensifying the state’s push against such platforms. The First Judicial District Court issued a preliminary injunction on March 26, concluding that Nevada is likely to succeed in its legal challenge.
The decision follows a temporary restraining order granted in February that had already limited Coinbase’s operations. The latest ruling keeps restrictions in place while litigation continues.
Coinbase, known for cryptocurrency trading, recently entered prediction markets through a partnership with Kalshi, which facilitates trading on outcomes tied to sports, elections, and other events. This move placed the company at the center of an escalating legal dispute over regulation.
The court rejected a central claim by operators that federal law grants exclusive oversightto the Commodity Futures Trading Commission. It stated that “based on the current state of the law” the Commodity Exchange Act “fairly interpreted does not vest exclusive jurisdiction over event contracts traded through Coinbase’s platforms with the Commodity Futures Trading Commission.”
A legal expert underscored the significance: “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.”
Legal Divide Across States Deepens
Nevada’s action comes amid a rising number of legal disputes nationwide involving prediction markets. More than a dozen states are contesting whether these platforms fall under state gambling laws or federal financial oversight.
State officials argue that contracts tied to real-world outcomes resemble wagering and require licensing. Nevada regulators stress compliance with rules such as age limits and safeguards against insider betting.
Operators like Kalshi maintain their products are financial instruments governed at the federal level. This disagreement has produced mixed court outcomes. Nevada and Massachusetts have secured rulings backing state authority, while a Tennessee court blocked enforcement of local gambling laws against Kalshi.
Nevada has also taken direct action against Kalshi. On March 20, it secured a temporary restraining order preventing the company from operating locally. The injunction against Coinbase followed days later.
Rapid Growth Fuels Regulatory Scrutiny
The surge in legal challenges coincides with rapid expansion in the prediction markets sector. Industry data indicates that the segment has grown significantly, with a reported 256 percent increase in performance during 2025. Early growth was linked to interest in the 2024 U.S. presidential election, though analysts note that sports-related contracts have driven more recent activity.
The Nevada case also carries operational consequences for Coinbase. According to legal commentary, “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.”
As conflicting rulings continue to emerge, the broader question of regulatory authority remains unresolved. With courts divided and the industry expanding, the issue appears increasingly likely to reach the highest levels of the US legal system.
Source:
“Court Grants Nevada’s Preliminary Injunction Against Coinbase”, finance.yahoo.com. Mar 29, 2026
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