Nevada's regulatory body has initiated legal proceedings against Coinbase, alleging unauthorized betting activities linked to sports events. The Nevada Gaming Control Board has filed a civil suit against Coinbase Financial Markets, accusing the company of operating unlicensed sports event wagers.
The lawsuit was lodged on Monday in the First Judicial District Court in Carson City, Nevada. The authorities are seeking a temporary restraining order and a preliminary injunction to halt Coinbase's operations related to a derivatives exchange and prediction market for sports betting.
"Our commitment to maintaining a robust gaming industry and safeguarding Nevada's citizens is paramount," stated Mike Dreitzer, Chair of the Nevada Gaming Control Board, in a statement issued Tuesday. "This action underscores our dedication to this responsibility."
This legal move follows closely on the heels of Coinbase's announcement about launching prediction markets across all 50 states in collaboration with Kalshi. Though Kalshi is regulated by the U.S. Commodity Futures Trading Commission at the federal level, state regulators like those in Nevada can still pose challenges.
In a similar vein, a Nevada court recently issued a temporary restraining order against Polymarket, restricting the platform from offering event-based contracts to Nevada residents. The presiding judge cited potential "immediate" and "irreparable" harm to regulatory oversight without proper licensing.
These cases involving Coinbase and Polymarket might test the CFTC's jurisdiction over platforms like Kalshi and Polymarket, especially in the absence of explicit legislative guidance. Cointelegraph reached out to a Coinbase representative for comment but has not yet received a response.