TL;DR
- A Nevada judge issued a temporary restraining order that blocks Polymarket activity by barring sports-related event contracts for Nevada residents while a preliminary injunction is considered.
- The dispute centers on whether Polymarket’s sports event contracts fall under state gaming law or remain governed by CFTC regulation, with the court rejecting claims of exclusive federal control at this stage.
- The case highlights a broader conflict between prediction markets vs. betting, testing how far states can apply gaming statutes to federally structured event contracts without a final ruling on legality.
A Nevada judge has issued a temporary restraining order that affirmatively bars Polymarket from offering event-based contracts to Nevada residents for roughly two weeks, pending a preliminary injunction hearing expected around February 11. The court order does not resolve the case on the merits but temporarily halts Polymarket’s Nevada-facing activity based on findings that the state showed a likelihood of unlicensed gaming violations and irreparable harm to its regulatory regime.
The action follows a civil enforcement filing by the Nevada Gaming Control Board. The agency alleges that specific sports event contracts constitute wagering under Nevada law and therefore require state licensure. Polymarket disputes that characterization. The dispute turns on regulatory authority and statutory definitions, not allegations of fraud.
What the Polymarket Nevada court order actually does — and what it doesn’t
The court issued a temporary restraining order that Polymarket must comply with for a short, defined period. The order blocks Polymarket from offering sports-related event contracts to Nevada residents while the court considers whether to grant a preliminary injunction. It is more than a neutral pause. The judge found that Nevada demonstrated a likelihood of success on claims of unlicensed gaming and irreparable harm to the state’s regulatory framework if the activity continued.
The TRO is narrow and time-bound, and it does not impose penalties. Neither does it make a final determination on legality. The court will revisit the dispute after further briefing and argument. But when issuing the TRO, the judge rejected the argument that federal commodities law gives exclusive control over these contracts at this stage. The court concluded that Nevada had shown sufficient grounds to enforce its gaming statutes temporarily. The filing was brought by the regulator, not private parties. In the lawsuit, the Nevada Gaming Control Board frames the conduct as unlicensed wagering rather than misconduct.
Why Nevada filed the Polymarket lawsuit now
The lawsuit cites specific provisions of Nevada law governing gaming and wagering, including NRS 463.160, 463.350, 465.086, and 465.092. These provisions prohibit unlicensed gaming operations and wagering offered to state residents. The complaint focuses on sports event contracts tied to professional and collegiate competitions, including NBA, NHL, and college basketball games.
Timing is part of the context. Nevada moved as major sports events approached, when exposure to sports-linked contracts is highest. While not quoted directly in filings, it is reasonable to view the proximity to marquee sporting events as a factor that heightened regulatory urgency.
The Nevada vs. Polymarket lawsuit does not allege fraud or deception. It centers on classification and licensing. If Polymarket’s activity fits Nevada’s statutory definitions of wagering, the state argues, gaming laws apply regardless of how the products are described.
The CFTC context most coverage skipped
Polymarket has publicly emphasized a federal regulatory pathway for its U.S. activities. That position is informed by prior interaction with the Commodity Futures Trading Commission, including a 2022 CFTC enforcement action that resulted in a civil penalty and an order to wind down non-compliant markets. Since then, the company restructured its U.S. approach.
By late 2025, the CFTC approved an Amended Order of Designation enabling Polymarket to offer event contracts through CFTC-licensed entities it acquired, namely QCX LLC (a Designated Contract Market) and QC Clearing LLC, allowing intermediated trading via futures commission merchants (FCMs), traditional custody, and enhanced surveillance and reporting. That compliant structure differentiates its current U.S. offering from its earlier, crypto-native iteration.
That history shapes the CFTC regulation argument, but does not resolve it. Event contracts can fall within federal commodities frameworks when properly structured, a point contested in ongoing litigation involving other platforms.
Against that backdrop, the Polymarket Nevada court order is not about blockchain rails. It is about whether Nevada can apply its gaming statutes to event contracts offered to residents, notwithstanding federal oversight claims.
>>> Related: Polymarket CFTC Approval: Risks Behind the U.S. Relaunch
Prediction markets vs betting: why labels won’t decide this case
Much of the debate is framed as prediction markets vs betting. The distinction explains the parties’ positions but does not decide the outcome.
Nevada focuses on statutory effect. When users stake funds on sports outcomes and receive payouts based on results, the regulator treats the activity as wagering. Polymarket, for its part, has publicly emphasized market structure and pricing mechanisms typical of event contracts.
Courts, however, look beyond labels. The prediction markets vs betting question matters insofar as it informs statutory coverage and jurisdiction. The sharpest conflict arises with sports prediction markets, where state gaming laws are most developed and strictly enforced.
The real legal question: federal preemption versus state gaming law
The dispute is not limited to federal preemption. It also turns on whether the challenged activity fits Nevada’s statutory definitions of wagering under state gaming law.
Polymarket is expected to argue that federal commodities oversight limits, or preempts, state licensing requirements when contracts are offered through a federally regulated structure. Nevada counters that its gaming statutes apply when residents are offered sports event contracts without a state license.
At the TRO stage, the court sided with Nevada on a preliminary basis. It rejected claims of exclusive federal control under the Commodity Exchange Act for purposes of temporary relief. The Nevada Gaming Control Board vs. Polymarket lawsuit will test these issues more fully at the preliminary injunction phase.
Why sports contracts are the pressure point
The complaint targets sports event contracts tied to NBA, NHL, and college basketball games. Sports wagering sits at the core of Nevada’s gaming regime, and the TRO reflects that focus.
The order cites traditional regulatory concerns, including integrity safeguards, suitability, and protections related to underage participation. Those considerations help explain why sports-linked contracts drew immediate enforcement attention.
The Nevada court order thus isolates sports as the test case for how far state gaming authority extends over event-based markets like Polymarket.
Why the Nevada court order matters beyond the Polymarket case
The implications extend beyond a single platform. Nevada has already targeted similar operators: a 2025 cease-and-desist forced Crypto.com to suspend Nevada sports contracts after a federal loss (appeal pending), while Kalshi won a temporary injunction but lost it in November when the judge ruled its sports event contracts subject to state gaming rules (Ninth Circuit stay).
A ruling for Nevada here would reinforce regulators’ ability to apply gaming statutes to sports-linked event contracts, building on those precedents. A ruling for Polymarket would strengthen federal-primacy arguments and disrupt the pattern.
The outcome will shape U.S. prediction-markets regulation and influence how platforms structure offerings to residents. The order illustrates courts’ use of temporary relief to manage regulatory harm without final judgments.
>>> Related: Crypto.com Nevada Lawsuit Fuels CFTC vs. State Dispute
What happens next
The TRO will expire unless extended after further proceedings. The court will consider whether to grant a preliminary injunction, focusing on statutory coverage, likelihood of success, and the balance of harms.
Whatever the outcome, appeals are likely. The Nevada vs. Polymarket lawsuit raises recurring questions about the boundary between state gaming authority and federally regulated markets. The current order is best understood as a procedural step signaling agreement with Nevada’s likelihood-of-success arguments, not a final resolution on legality.
