State court ruling against Polymarket may force prediction markets to seek licenses or exit sports trading.
Nevada regulators have moved to block a major crypto-based prediction market from operating in the state. In a key legal setback, a state court ordered Polymarket to halt event-based contracts for Nevada residents. As per market commentators, the ruling raises broader questions about how such platforms fit within gambling and derivatives law on US soil.
Polymarket Pauses Event Contracts in Nevada Following Court Order
A Nevada state court issued a temporary restraining order preventing Blockratize, the operator behind Polymarket. Effectively, the order stops the firm from offering event-based contracts to residents.
Judge Jason Woodbury granted the order on Saturday after siding with the Nevada Gaming Control Board. The ban is set to remain until the hearing on a possible preliminary injunction slated for February 11.
Woodbury rejected arguments claiming federal law shields Polymarket from state oversight. According to the order, the Commodity Exchange Act does not grant exclusive authority to the CFTC over Polymarket’s contracts. Nevada regulators argued those contracts qualify as unlicensed sports wagering under state law.
Nevada Gaming Control Board officials said Polymarket’s mobile app allows wagering activity without state approval. As contained in the court filings, such activity weakens Nevada’s strict licensing system.
In fact, Judge Woodbury explained that bypassing state rules would cause immediate harm that money could not repair.
Other regulatory concerns captured in the court filing include:
- Risk of wagers placed by individuals able to influence sporting outcomes.
- Limited safeguards preventing underage participation.
- Lack of controls blocking unsuitable or barred individuals.
- Reduced oversight from regulators tasked with enforcing gaming laws.
Judge Woodbury stated that an unlicensed operator outside the Board’s reach interferes with its ability to carry out statutory duties. And as such, maintaining strong oversight serves public interest and protects industry integrity.
Polymarket appears to have already stopped offering event contracts within Nevada. Founder of Wallach Legal LLC Daniel Wallach said on X that the platform had likely complied with the order.
Court Ruling Adds Momentum to Global Scrutiny of Prediction Markets
Legal experts say Nevada’s move could lead to wider consequences if upheld. Essentially, platforms such as Polymarket and rival Kalshi may be forced to seek state-tied licences.
Sports markets make up over 80% of trading activity on some prediction platforms. Losing access to those markets could force companies to rethink how they operate and generate revenue.
IGNOS Law Alliance partner Even Alex Chandra mentioned that doubling down on state could put a strain on the sector. In her view, it could increase compliance costs and legal uncertainty.
It appears that Polymarket has already ceased offering event contracts in Nevada. https://t.co/4QBT0l4cXQ
— Daniel Wallach (@WALLACHLEGAL) January 31, 2026
Nevada’s move follows recent actions worldwide. Regulators in Hungary and Portugal issued bans against Polymarket earlier this month, citing illegal gambling activity. Tennessee’s Sports Wagering Council also sent cease-and-desist letters to Polymarket, Kalshi, and Crypto.com, ordering sports markets removed and wagers refunded.
In Congress as well, lawmakers recently introduced the Public Integrity in Financial Prediction Markets Act of 2026. The bill would bar federal officials from trading in prediction markets when holding non-public information or influence over outcomes.
