Nevada Court Halts Polymarket Operations, Casting Shadow Over Prediction Markets
A Nevada state court has dealt a significant blow to the prediction market platform Polymarket, granting a temporary restraining order that halts its operations in the state. The ruling, issued by Judge Jason Woodbury on Saturday, sides with the Nevada Gaming Control Board (NGCB) in its claim that Polymarket’s event-based contracts likely violate state gambling laws.
The court found that the federal Commodity Exchange Act does not grant the Commodity Futures Trading Commission (CFTC) exclusive oversight over Polymarket’s activities, clearing the path for state-level enforcement. The order effectively blocks Blockratize, Polymarket’s operating entity, from offering its contracts to Nevada residents for two weeks, pending a hearing for a preliminary injunction scheduled for February 11.
Judge Woodbury emphasized the state’s interest in maintaining control over its regulated gaming industry. "The resulting harm in evasion of Nevada's comprehensive regulatory structure is immediate, irreparable," he wrote, noting that unlicensed platforms obstruct the board’s ability to prevent insider wagering, underage participation, and other risks.
The Nevada action is not an isolated case but part of a widening regulatory offensive. This month alone, authorities in Hungary and Portugal issued outright bans against Polymarket, labeling it an illegal gambling operation. Earlier, Tennessee’s Sports Wagering Council sent cease-and-desist letters to Polymarket and competitor Kalshi, demanding they pull sports-related markets accessible to state residents.
Analysts suggest the implications could be profound. If the injunction is made permanent, platforms like Polymarket and Kalshi may face a stark choice: navigate a complex, state-by-state licensing gauntlet traditionally reserved for sportsbooks, or abandon sports and event contracts—a segment that reportedly drives over 80% of trading volume for some prediction markets.
"This significantly raises the compliance burden and legal uncertainty for the entire sector," said Even Alex Chandra, a partner at IGNOS Law Alliance. "It could chill investment and slow innovation at a critical time for these platforms." Chandra called for clearer federal guidelines to standardize the industry and foster long-term stability.
On the political front, Rep. Ritchie Torres (D-NY), alongside 30 colleagues including former Speaker Nancy Pelosi, recently introduced the Public Integrity in Financial Prediction Markets Act of 2026. The proposed legislation aims to ban federal officials with access to non-public information from participating in such markets.
In response to the Nevada order, Daniel Wallach of Wallach Legal LLC noted on X that Polymarket appears to have already ceased offering contracts in the state. The company did not immediately respond to a request for comment.
User Reactions
Marcus Chen, Fintech Analyst: "This is a pivotal test for the regulatory classification of prediction markets. The court’s dismissal of federal preemption arguments sets a precedent other states will likely follow, forcing the industry to adapt or retrench."
Rebecca Shaw, Las Vegas Resident: "As someone who uses these platforms, it’s frustrating. They feel more like financial tools than casino betting. The state is protecting its turf and tax revenue, not necessarily the public."
David Keller, Former Gaming Compliance Officer: "This is a long-overdue enforcement action. These platforms have been operating in a gray area, bypassing all the consumer protections, anti-money laundering checks, and integrity safeguards that licensed Nevada operators spend millions to uphold. It’s sheer arrogance to think gambling laws shouldn’t apply to them."
Priya Singh, Crypto Investor: "The decentralized ethos of crypto and prediction markets is crashing into the brick wall of legacy regulation. Innovation shouldn’t be stifled because it doesn’t fit into old regulatory boxes. This is a setback for the entire DeFi ecosystem."