Coinbase Sues Nevada Over Prediction Markets Ban

Crypto exchange files federal lawsuit after state regulator moves to block its sports event contracts

Feb. 4, 2026 at 9:31pm

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Coinbase has filed a federal lawsuit against the Nevada Gaming Control Board (NGCB) after the regulator sued the cryptocurrency exchange to prevent it from offering sports event contracts in the state. Coinbase argues that the NGCB is improperly using Nevada's gaming statutes to block its prediction market offerings, which it says are regulated at the federal level by the Commodities Futures Trading Commission (CFTC) under the Commodities Exchange Act.

Why it matters

The dispute highlights the ongoing legal battles between prediction market operators and state regulators who view these products as a form of illegal gambling. Nevada, home to the largest regulated sports betting market in the U.S., has taken a particularly hard stance against prediction markets, successfully suing other firms like Kalshi to force them out of the state. Coinbase's federal preemption argument could set an important precedent if it succeeds, but prediction market operators have struggled to win these types of legal challenges so far.

The details

In its lawsuit, Coinbase argues that Nevada's enforcement of state gaming laws against its prediction market offerings is preempted by federal regulations under the Commodities Exchange Act. Coinbase says the CFTC has 'constructed a comprehensive regulatory regime' to oversee event contract trading, leaving no room for concurrent state regulation. The company is also leaning on the CEA's grant of 'exclusive jurisdiction' to the CFTC over these types of derivatives traded on designated clearing markets.

  • On February 4, 2026, the Nevada Gaming Control Board (NGCB) filed a lawsuit against Coinbase to prevent the company from offering sports event contracts in the state.
  • On the same day, February 4, 2026, Coinbase responded by filing its own federal lawsuit against the NGCB and the Nevada Attorney General.

The players

Coinbase

A major cryptocurrency exchange and brokerage firm that recently entered the prediction markets industry, offering sports event contracts through a partnership with Kalshi.

Nevada Gaming Control Board (NGCB)

The state regulatory agency that oversees Nevada's gaming industry and has taken legal action to prevent prediction market operators from offering sports derivatives in the state.

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What they’re saying

“Nevada's enforcement of its state laws is preempted several times over. The CEA's grant of 'exclusive jurisdiction' to the Commodities Futures Trading Commission (CFTC) over event contracts traded on designated clearing markets (DCMs) forecloses any state claims.”

— Coinbase (Coinbase's federal lawsuit)

“Nevada's public policy, as expressed by the Legislature, is that the gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants and therefore must be licensed, controlled, and assisted to protect the public health, safety, morals, good order, and general welfare of the inhabitants of the State.”

— Nevada Gaming Control Board (Nevada's lawsuit against Coinbase)

What’s next

The federal court will need to rule on Coinbase's preemption argument and whether Nevada's enforcement of state gaming laws against the company's prediction market offerings is valid.

The takeaway

This legal battle highlights the ongoing tensions between state regulators, who view prediction markets as a form of illegal gambling, and companies like Coinbase that argue these products are federally regulated derivatives. The outcome could set an important precedent for the future of the prediction markets industry in the U.S.