Crypto Reporter
Shalini Nagarajan
Crypto Reporter
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A Nevada state judge has temporarily blocked Polymarket from offering sports and event contracts to residents, handing state regulators an early win in a fast-moving fight over who gets to police prediction markets.
The order targets Blockratize, the entity behind Polymarket, along with related defendants listed as QCX LLC, doing business as Polymarket US, and Adventure One QSS, Inc., also doing business as Polymarket.
Judge Woodbury granted a renewed ex parte request for a temporary restraining order, which will remain in place for 14 days, while the court sets a hearing on the preliminary injunction motion for Feb. 11.
The dispute lands as Washington warms to the idea that prediction markets need clearer guardrails.
Just last week, the CFTC’s chairman Michael Selig said the US derivatives watchdog is preparing a new rulebook for prediction markets, as platforms such as Polymarket and Kalshi pull in billions in activity by letting traders bet yes or no on everything from politics to pop culture.
State Gaming Rules Hold Ground Against Federal Jurisdiction Claims
Polymarket has argued that its contracts fall under federal oversight, contending it “operates a federally designated contract market subject to the ‘exclusive jurisdiction’ of the Commodity Futures Trading Commission.”
The state board has pushed back, saying Nevada law and licensing standards still apply when those contracts are offered to residents.
In granting the temporary order, the court signalled it is not persuaded, at least for now, that federal law blocks Nevada from acting. Judge Woodbury wrote, “The question of federal preemption… is nuanced and rapidly evolving. At the moment, the balance of convincing legal authority weighs against federal preemption in this context,” calling earlier reasoning in related litigation persuasive.
Unlicensed Operators Seen As Threat To Regulatory Integrity
The ruling also leans heavily on the board’s claim that an unlicensed operator can erode Nevada’s ability to run a tightly controlled gaming market. Judge Woodbury said, “The resulting harm in evasion of Nevada’s ‘comprehensive regulatory structure’ and ‘strict licensing standards’ is immediate, irreparable and not sufficiently remediable by compensatory damages.”
The court pointed to practical enforcement gaps that Nevada says it cannot close without jurisdiction, including limited ability to ensure wagers are not accepted from people who could influence outcomes in sporting events, and limited tools to prevent underage participants from buying event contracts.
The decision is an early marker in a broader tug of war between state gaming regulators and platforms that pitch event contracts as financial products, not wagers.
