A Nevada state court has temporarily blocked Polymarket operator Blockratize from offering sports and event-based contracts to residents, escalating regulatory pressure on prediction market platforms ahead of a preliminary injunction hearing scheduled for February 11.
In an order issued over the weekend, Judge Jason Woodbury sided with the Nevada Gaming Control Board, ruling that federal derivatives law does not grant the Commodity Futures Trading Commission exclusive authority over Polymarket’s contracts, allowing Nevada regulators to enforce state gaming laws.
The two-week temporary restraining order prevents Polymarket from offering sports and event contracts in Nevada while the court considers whether a longer injunction should follow. Regulators argue the platform operates as unlicensed sports wagering under state statutes, creating regulatory risks for the state’s tightly controlled gaming market.
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Court Ruling Challenges Federal Shield Claims
The Gaming Control Board filed a civil action seeking to halt what it describes as unauthorized wagering activity offered through Polymarket’s mobile platform. The court determined that continued operations could undermine Nevada’s licensing framework and weaken oversight designed to prevent improper betting participation.
Judge Woodbury cautioned that by allowing unlicensed operators to operate, the state’s ability to prohibit bets by people who could influence sports results and avoid age and suitability standards is undermined. Another observation by legal commentators is that Polymarket has already limited Nevada users’ access to event contracts since the ruling.
Compliance Costs Rise Across Prediction Markets
If this injunction is made permanent, platforms such as Polymarket and its competitor Kalshi may have to obtain licenses on a state-by-state basis or limit their sports-related offerings, which make up a significant percentage of some sports prediction markets.
Legal experts warn that such a system could result in increased costs for compliance and create confusion for investors and operators alike. The regulatory spotlight is also being shone from outside borders, as Hungary and Portugal have recently initiated steps to ban Polymarket for alleged illegal gambling activity.
In the United States, Tennessee regulators took steps to shut down sports betting deals being pitched to locals. The federal government introduced the Public Integrity in Financial Prediction Markets Act of 2026, which sought to prevent federal officials from participating in markets where there was a risk of insider information being used.
Why This Matters
The Nevada case could prompt prediction market platforms to secure costly state licenses or forego sports markets altogether, limiting market liquidity and stifling market growth.
If Nevada-style enforcement expands, however, it could inject regulatory uncertainty into the U.S. prediction markets space.
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