Cryptocurrency exchange giant Coinbase is facing significant regulatory headwinds in Nevada after state gaming authorities targeted its nascent prediction markets platform. The Nevada Gaming Control Board (NGCB) has reportedly issued warnings and begun investigations into the exchange’s offering, alleging that it constitutes unlicensed sports betting.
Prediction markets, which allow users to wager cryptocurrencies on future real-world events—including outcomes tied to sporting events—have been criticized for blurring the line between financial derivatives and traditional gambling. Regulators in Nevada, the epicenter of licensed U.S. sports wagering, assert that when these platforms involve outcomes tied to sports results, they fall squarely under state gaming jurisdiction.
An NGCB spokesperson stated that any entity facilitating wagering on sports within the state borders must hold a valid gaming license, irrespective of whether the transaction is conducted via fiat currency or cryptocurrency. The regulator views Coinbase’s prediction features, particularly those based on sports outcomes, as functionally equivalent to operating an unlicensed sports book.
The conflict underscores the growing tension between innovative decentralized finance (DeFi) tools and traditional, highly regulated frameworks. While Coinbase has often argued that its prediction market features are governance mechanisms or risk management products rather than gambling, Nevada regulators appear unconvinced, viewing the operation as a direct threat to the integrity of their heavily regulated sports betting industry. The potential penalties for Coinbase include substantial fines and a mandated cease-and-desist order operating within the state, potentially setting a broader precedent for how prediction markets are treated across the United States.
Source: Coinbase’s prediction markets draw fire from Nevada regulator over alleged unlicensed sports betting
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