A state judge from Nevada has blocked prediction market Polymarket from temporarily offering event contracts in the state, rejecting the industry argument that only the Commodity Futures Trading Commission (CFTC) has the authority to regulate such markets. The decision goes against the industry’s position that federal commodities law overrides state gambling regulations.
Regulatory Clash
The Nevada Gaming Control Board took Polymarket operator Blockratize to court, accusing it of violating state law by offering event-based contracts that are essentially unlicensed wagering. The court held that to be the case and thus issued a 14-day temporary restraining order (TRO) against Polymarket.
Polymarket had maintained that the Commodity Exchange Act granted the CFTC exclusive jurisdiction over its event contracts. Such a decision is part of a more widespread crackdown on prediction markets.
In fact, regulators in Tennessee also instructed Kalshi, Polymarket, and the North American Derivatives Exchange to stop offering sports event contracts to their state residents.
Also Read: Nevada Court Blocks Polymarket Contracts Ahead of Key Hearing
Prediction Markets’ Implications
The Nevada decision may significantly affect prediction markets and the crypto industry at large. If the decision is enforced, Polymarket-type platforms could be required to obtain permission from a state or could even be prohibited from offering event contracts in certain states.
The CFTC has shown through its actions that it may step up its efforts to justify its exclusive control over prediction markets. The outcome of this case may shape the way regulators treat similar platforms later on.
Also Read: Hyperliquid $HYPE Breaks Records with 5,000% ROI on Polymarket
