Nevada state judge has issued a 14-day temporary restraining order (TRO) against Polymarket operator Blockratize, effectively suspending its operations in the state. The ruling, handed down on January 29, 2026, marks a critical victory for the Nevada Gaming Control Board (NGCB) and a direct challenge to the Commodity Futures Trading Commission (CFTC)’s claim of exclusive jurisdiction over event contracts. Judge Jason Woodbury rejected the industry’s long-standing argument that federal commodities law preempts state gaming statutes, classifying the decentralized prediction market’s offerings as unlicensed sports wagering rather than regulated financial products. This local enforcement action arrives as the national debate reaches a fever pitch, with states like Tennessee and New York aggressively moving to classify prediction markets as gambling, just as the newly appointed CFTC Chairman Michael Selig signals a federal push to withdraw Biden-era restrictions and reaffirm national oversight.

• A 14-day freeze on Polymarket’s event contracts in Nevada sets the stage for a high-stakes preliminary injunction hearing on February 11.
• The ruling emphasizes "irreparable harm" to state gambling integrity, creating a blueprint for other states to bypass federal registration claims.
• Discover the widening gap between the Trump administration's pro-innovation federal stance and the "50-state-patchwork" approach favored by local regulators.

The core of the dispute lies in the legal definition of an "event contract." Polymarket and other platforms such as Kalshi argue that their products are derivatives regulated by the Commodity Exchange Act, which should theoretically shield them from state-level gambling enforcement. However, Nevada regulators successfully argued that markets based on sports and other outcomes constitute unlicensed wagering under the state's rigorous gaming codes.

Judge Woodbury’s ruling cited the necessity of protecting the public from underage gambling and ensuring the "suitability standards" that Nevada’s multi-billion dollar casino industry must follow. By rejecting federal preemption, the court has effectively signaled that a CFTC license is not a "get out of jail free" card for operating within state borders. This local friction follows the strategic retreat of Gemini from the NFT marketplace sector, as firms increasingly prioritize core, compliant services over legally contentious sub-sectors.

Nevada is not alone in this crackdown. In early January 2026, Tennessee’s Sports Wagering Council issued cease-and-desist orders to Polymarket, Kalshi, and Crypto.com, demanding a total halt of sports-related contracts. Tennessee officials even threatened criminal referrals for "aggravated gambling promotion," a felony under state law. These state actions are putting enormous pressure on the industry, as many platforms were just beginning to re-enter the U.S. market following a favorable shift in federal sentiment.

This "patchwork" of regulations is precisely what Coinbase sought to prevent when it sued regulators in Connecticut, Illinois, and Michigan in December 2025. The exchange asked federal courts to declare that markets listed on a CFTC-regulated venue fall under exclusive federal jurisdiction. As the House of Lords explores stablecoin frameworks in the UK, the U.S. remains uniquely fragmented, with federal and state authorities locked in a fundamental disagreement over who controls the digital betting slip.

While states are pulling the reins, the federal government is moving in the opposite direction. CFTC Chairman Michael Selig announced on January 29 that the agency would withdraw a 2014 rule that sought to ban political and sports-related contracts. Selig’s goal is to establish "clear, durable standards" and defend the agency's exclusive jurisdiction. This federalist clash is reminiscent of the SEC's recent "pay-to-play" allegations, where political shifts at the top directly impact enforcement on the ground.

The February 11 hearing in Nevada will be a watershed moment. If the TRO converts into a preliminary injunction, it will solidify the state's power to treat prediction markets as sportsbooks. For Polymarket, which has suspended access to Nevada users and geofenced the state, the legal bill is mounting. The outcome will likely determine whether the "everything exchange" model can survive in the U.S., or if decentralized forecasting will be forced back to the offshore shadows.

Quotes and Expert Opinions

"Every day Polymarket operates means more potential harm to the state’s ability to monitor wagers, enforce compliance, and carry out its regulatory functions. The harm is irreparable and non-compensable." — Judge Jason Woodbury, Nevada First Judicial District Court

"It is time for clear rules. The CFTC will move forward with new rulemaking to establish durable standards for event contracts and will defend its exclusive jurisdiction over commodity derivatives." — Michael S. Selig, CFTC Chairman

"The road forward is clear – and it runs through the CFTC. Congress gave only the CFTC authority over event contracts. Prediction markets are fundamentally different from sportsbooks; they are neutral exchanges that match buyers and sellers." — Paul Grewal, Chief Legal Officer at Coinbase

FAQs

Why did Nevada ban Polymarket if it is regulated by the CFTC?
The Nevada state judge ruled that Polymarket’s event contracts constitute unlicensed gambling under state law. The court rejected the argument that CFTC oversight (federal law) automatically takes precedence over Nevada’s ability to regulate gambling within its borders.

What is the difference between a prediction market and a sportsbook?
Industry leaders like Coinbase argue that prediction markets are "neutral exchanges" where users trade against each other, whereas sportsbooks take the "other side" of a bet and profit from user losses. However, Nevada regulators argue that any platform facilitating wagers on sports outcomes is a sportsbook regardless of the technical structure.

What happens next for Polymarket in Nevada?
The current 14-day ban is temporary. A hearing on February 11, 2026, will determine if the court will issue a "preliminary injunction," which would extend the ban much longer as the full case proceeds through the legal system.