The board said in a Tuesday (Feb. 3) press release that it considers the offering of sports event contracts and certain other event contracts to be wagering activity that requires the entities offering those event contracts to be licensed. For that reason, the board believes Coinbase’s operations to be illegal in Nevada, according to the release.
“The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens,” Mike Dreitzer, chairman of the Nevada Gaming Control Board, said in the release. “The action taken yesterday reinforces this obligation.”
Reached by PYMNTS, Coinbase provided a statement in which Ryan VanGrack, vice president of litigation at Coinbase, said the board’s move is a “state power grab” prohibited by Congress.
“Nevada’s lawsuit, filed without meaningful notice or opportunity for Coinbase to engage, is the type of state power grab that Congress explicitly prohibited when granting the CFTC [Commodity Futures Trading Commission] exclusive jurisdiction over event contracts,” VanGrack said in the statement.
“It is also a manufactured emergency. This is a blatant attempt to end-run the Federal Courts’ consideration of these issues and underscores the need for consistent rules that protect consumers and ensure equal access to these markets — regardless of where you live in America.”
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PYMNTS reported Tuesday that a prediction market boom is playing out at a time when the regulatory environment surround prediction markets remains uncertain.
There are several instances in which jurisdictional questions remain at issue around prediction markets, with several states having moved to classify prediction markets as gambling, bringing them under existing sports betting statutes.
It was reported Monday (Feb. 2) that Nevada temporarily banned prediction market platform Polymarket from offering sports and event contracts to residents outright, including during the period in which the Super Bowl will take place.
On Jan. 20, Massachusetts Attorney General Andrea Joy Campbell secured a preliminary injunction that may block prediction market platform Kalshi from including sports and related event contracts on its prediction market in that state. The preliminary injunction will prohibit Kalshi from accepting those contracts from customers in the state until it is licensed by the Massachusetts Gaming Commission.
It was reported Jan. 12 that the Tennessee Sports Wagering Commission sent cease-and-desist letters to Polymarket, Kalshi and Crypto.com, ordering the companies to immediately pull any sports-related markets accessible to Tennessee customers.
Similar moves were made earlier by other states, including New York, New Jersey, Maryland, Arizona and Illinois.
Coinbase announced in December that it would begin to allow access to prediction markets in the United States, with all market flow coming from Kalshi at launch, and that it acquired prediction market platform The Clearing Company.
Also in December, Coinbase filed lawsuits in Connecticut, Michigan and Illinois, challenging each state’s efforts to control or block prediction markets.
Paul Grewal, chief legal officer at Coinbase, said in a Dec. 18 post on X that the lawsuits will confirm that “prediction markets fall squarely under the jurisdiction of the [CFTC], not any individual state gaming regulator (let alone 50).”
