Coinbase Hit with Legal Action by Nevada Regulators for Operating Unlicensed Betting Services
The regulatory enforcement targeting sporting event contract wagers comes on the heels of Coinbase rolling out prediction market services across all American states.
Nevada's Gaming Control Board has publicly disclosed the filing of a civil enforcement lawsuit targeting Coinbase concerning wagers placed on sporting event contracts.
Through documentation submitted on Monday to the First Judicial District Court of the State of Nevada in and for Carson City, the Nevada Gaming Control Board initiated legal proceedings against Coinbase Financial Markets based on claims that the firm provided unlicensed wagering opportunities on sporting events. State authorities subsequently petitioned the court to issue a temporary restraining order along with a preliminary injunction that would bar Coinbase from "operating a derivatives exchange and prediction market" in connection with sports-related betting activities.
"The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens. The action taken yesterday reinforces this obligation."
Mike Dreitzer, chair of the Nevada Gaming Control Board
The lawsuit emerged fewer than seven days following Coinbase's public announcement regarding the rollout of prediction market services throughout all 50 American states through a collaborative arrangement with Kalshi. Although the US Commodity Futures Trading Commission provides federal-level supervision of Kalshi, the service remains vulnerable to legal actions brought forth by state regulatory bodies, including those operating in Nevada.
Cointelegraph contacted a representative from Coinbase seeking commentary on the matter, though no response had been provided by the time this article went to press.
Polymarket encounters comparable regulatory hurdles in Nevada
During the previous week, a Nevada judicial authority issued a temporary restraining order directed at a Polymarket operator, effectively preventing the platform from providing wagering services on event-based contracts to individuals residing within the state. The presiding judge in the proceedings referenced "immediate" and "irreparable" damage to regulatory authorities' capacity to oversee betting operations conducted without proper licensing.
The legal proceedings involving Coinbase and Polymarket, along with similar litigation at the state regulatory level, have the potential to test the CFTC's jurisdiction over prediction market platforms such as Kalshi and Polymarket in the absence of explicit legislative frameworks.