Date of Publication: February 4, 2026, 08:38h.
Latest Update: February 4, 2026, 08:38h.
- The Nevada Gaming Control Board has initiated legal proceedings against Coinbase to prohibit its sports event contracts in the state.
- In rapid response, Coinbase has launched its own lawsuit.
- The firm deems Nevada’s legal actions as a contrived emergency.
On Wednesday, Coinbase Global (NASDAQ: COIN) took action against a lawsuit from the Nevada Gaming Control Board (NGCB) by filing its own legal claim against the regulator and the attorney general.
The prominent cryptocurrency broker, which recently ventured into the prediction markets sector, filed a suit in federal court claiming that Nevada is misusing its gaming laws to obstruct the company’s event contracts from being offered in the state. Coinbase has previously filed similar lawsuits against regulators in Connecticut, Illinois, and Michigan after facing civil enforcement actions from those jurisdictions.
In its legal action from Tuesday, Nevada contends that Coinbase’s sports derivatives qualify as sports betting under state law since they are linked to the outcomes of sporting events and “other uncertain outcomes.”
According to the Nevada lawsuit, “Coinbase’s event contracts are wagers. A user invests money in an event contract based on an outcome, and the user earns a payout if the outcome materializes, but not if it does not.”
Coinbase, based in California, provides event contracts through a collaboration with Kalshi.
Coinbase Emphasizes Federal Supremacy
In line with partner Kalshi and other operators in prediction markets, Coinbase is banking on federal preemption—the legal principle that federal law overrides state regulations—in its confrontation with Nevada. The Commodities Exchange Act (CEA) is pivotal to this defense.
“Nevada’s application of its state laws is preempted in multiple ways,” states the lawsuit from Coinbase. “The CEA grants ‘exclusive jurisdiction’ over event contracts traded on designated clearing markets (DCMs) to the Commodities Futures Trading Commission (CFTC), effectively negating any state claims. Furthermore, the CFTC has established a detailed regulatory framework for overseeing both event-contract trading and the associated entities.”
The federal preemption argument holds weight; however, it has not proven successful for prediction market operators, many of whom are incurring losses in various states facing legal disputes. Nonetheless, Coinbase is taking a calculated risk in Nevada, underscoring its status as a federally regulated entity.
“Allowing states like Nevada to encroach upon the CFTC’s authority would undermine Congress’s efforts to maintain consistency in the futures market, subjecting companies like Coinbase to state regulations that contradict federal standards,” argues the crypto broker in its legal submission. “Federal statutes do not allow for concurrent state oversight in this arena.”
Nevada: A Challenging Environment for Prediction Markets
Nevada, known for Las Vegas and the premier regulated sports betting sector in the US, has adopted a stringent position against prediction markets and their attempts to offer sports derivatives within the state. Gaming companies and regulators have successfully pursued legal action against various prediction firms.
For instance, last November, US District Judge Andrew Gordon decreed that Kalshi’s sports event contracts are essentially gambling, a ruling that pushed several other event contract platforms to withdraw their sports offerings from the state. Recently, the NGCB initiated civil enforcement against Polymarket, Kalshi’s competitor, stating that its sports derivatives resemble sports betting and could negatively impact the state’s gaming-centric economy.
“According to the state legislature, Nevada considers the gaming industry crucial to the state’s economy and public welfare, necessitating licensure, regulation, and support to safeguard public health, safety, morals, order, and overall welfare of the state’s residents,” remarked the regulator.