Coinbase is locked in a legal battle with the Nevada Gaming Control Board over whether federally regulated prediction market contracts can be treated as illegal gambling under state law.
The NGCB filed a civil enforcement action on Feb. 3 accusing Coinbase of offering unlicensed sports and event contracts in Nevada, while a federal judge later declined to grant emergency relief sought by Coinbase as parallel state and federal proceedings continue.
At the centre of the dispute is whether event-based contracts offered through Coinbase’s partnership with Kalshi, a CFTC-registered Designated Contract Market, qualify as regulated derivatives or unlawful wagers.
Nevada regulators argue that contracts tied to sports outcomes constitute wagering activity requiring a state gaming licence, citing statutes prohibiting unlicensed betting pools and unlawful gaming operations.
Coinbase, registered as a Futures Commission Merchant, contends that the contracts are swaps governed exclusively by the Commodity Futures Trading Commission under the Commodity Exchange Act and invokes federal preemption under the Supremacy Clause, and following the announcement the Coinbase share price was unchanged at $XX.
The exchange also noted that Kalshi remains accessible in Nevada under CFTC oversight, while the state has previously taken action against other platforms including Polymarket and Kalshi in separate proceedings.
The case could set a nationwide precedent, with a Nevada victory potentially enabling states to classify CFTC-approved event contracts as gambling, while a Coinbase win may reaffirm federal authority and establish a uniform regulatory path for crypto-linked prediction markets.