The Nevada Gaming Control Board has initiated a civil enforcement action against Coinbase Financial Markets, seeking to prevent the company from offering event-based contracts related to sports and elections to Nevada residents without the necessary state gaming licenses. This action underscores the agency’s commitment to safeguarding the interests of Nevada citizens and bolstering the integrity of the state’s gaming industry.
Board Chairman Mike Dreitzer highlighted that this enforcement action serves to reinforce the board’s obligations. The complaint was officially filed in the District Court for Carson City, alongside an application for a temporary restraining order that would halt Coinbase’s event contract offerings on its mobile app. The board contends that Coinbase’s activities constitute wagering as defined under Nevada laws, and thus, require licensing.
Coinbase recently launched its prediction markets product through a partnership with Kalshi, another entity registered with the Commodity Futures Trading Commission (CFTC). However, Nevada regulators argue that allowing users aged 18 and above to trade on the platform starkly contradicts the state’s minimum age requirement for gambling, which is set at 21.
The complaint seeks both a permanent injunction against Coinbase and declaratory relief regarding these matters. Regulators have pointed out that the operations of Coinbase could result in significant competitive advantages over licensed sportsbooks in the state. Licensed sportsbooks are compelled to pay fees, taxes, and comply with stringent consumer protection laws, while Coinbase’s activities may undermine this regulatory framework.
Coinbase has recently been embroiled in legal conflicts regarding prediction markets, filing lawsuits against gaming regulators in Connecticut, Michigan, and Illinois. In these lawsuits, Coinbase argues that the CFTC has exclusive jurisdiction over prediction markets and claims state enforcement actions stifle innovation and breach existing laws. Several states have responded by sending cease-and-desist letters to platforms claiming they were engaging in sports wagering without the proper permissions.
The Nevada Gaming Control Board’s action against Coinbase follows recent enforcement measures taken against other prediction market platforms such as Kalshi and Polymarket. The dispute with Kalshi began last March, culminating in a cease-and-desist order regarding its sports event contracts. A brief injunction in favor of Kalshi was later lifted, and the company is currently appealing that decision.
Legal experts are watching the developments closely. Notably, Daniel Wallach, a prominent legal authority in sports wagering and gaming law, recently noted that multiple amicus groups, including numerous states and tribal organizations, have backed Nevada’s position. In contrast, Kalshi has only garnered support from a single amicus filing linked to one of its investors.
This unfolding situation raises critical questions about the future of event contracts in the gaming industry and the regulation of emerging digital platforms against traditional gaming models.
