Nevada loses bid to halt Coinbase prediction markets as exchange hits back

The State of Nevada suffered a regulatory setback this week after a state court denied the Nevada Gaming Control Board’s (NGCB) request for an injunction to halt the operation of prediction markets offered by cryptocurrency exchange, Coinbase. The ruling marks a significant victory for the exchange and establishes a crucial precedent regarding state authority over novel crypto derivative products.

NGCB officials had argued that Coinbase’s new prediction market platform constituted illegal, unregulated gambling under Nevada state statutes, posing a direct threat to the state’s stringent licensed sports betting environment. The Board had sought an emergency cease-and-desist order to block Nevada residents from accessing the platform, citing concerns over consumer protection and the integrity of the state’s gaming framework.

Coinbase’s legal team mounted a strong defense, asserting that the prediction market instruments were properly classified as derivatives or commodities, not traditional wagers. The exchange emphasized that the product operates under international regulatory guidelines and accused the NGCB of regulatory overreach by attempting to impose gaming laws on complex financial instruments. Furthermore, Coinbase highlighted that strict geographical restrictions were already in place to comply with varying jurisdictional requirements.

In the court’s decision, the presiding judge found that the NGCB failed to provide sufficient evidence to definitively classify the prediction markets as gaming within the legal definition of Nevada law. The court noted the complex jurisdictional challenges inherent in regulating global digital asset platforms. This ruling allows Coinbase to continue offering the service, severely limiting the ability of state gaming regulators to unilaterally restrict access to non-traditional crypto finance products. The decision is expected to influence how other states approach the growing segment of crypto prediction markets.

Source: Nevada loses bid to halt Coinbase prediction markets as exchange hits back